Purchasing power parity under the European Monetary System

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review

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Author(s)

Detail(s)

Original languageEnglish
Pages (from-to)179-189
Journal / PublicationJournal of International Money and Finance
Volume14
Issue number2
StatePublished - Apr 1995

Abstract

Using reduced rank cointegration analysis, this study examines whether exchange rate realignments are effective in extenuating the deviations from purchasing power parity (PPP) under the European Monetary System (EMS). In contrast to previous studies, more positive evidence for the PPP hypothesis is found. The difference in findings can be attributed partly to the statistical technique used, the correction of the finite sample bias, and the adjustment for realignment effects. In general, the results of this study support that currency realignments of the EMS have been effective in maintaining PPP among its member countries. © 1995.

Citation Format(s)

Purchasing power parity under the European Monetary System. / Cheung, Yin-Wong; Fung, Hung-Gay; Kon S. Lai, S. Lai; Lo, Wai-Chung.

In: Journal of International Money and Finance, Vol. 14, No. 2, 04.1995, p. 179-189.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review