Long-run purchasing power parity during the recent float

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)181-192
Journal / PublicationJournal of International Economics
Volume34
Issue number1-2
StatePublished - Feb 1993
Externally publishedYes

Abstract

This paper examines the relevance of long-run purchasing power parity (PPP), which allows for measurement errors, during the recent floating exchange rate period. Previous empirical studies generally fail to find support for long-run PPP over this period. In this paper. In this paper the cointegration property of exchange rates and prices is examined using maximum likelihood procedure, and we find significant evidence favorable to long-run PPP. Further tests for symmetry and proportionality indicate that these two conditions are not generally with the data. The results support the hypothesis of long-run PPP with measurement errors in prices. © 1993.

Citation Format(s)

Long-run purchasing power parity during the recent float. / Cheung, Yin-Wong; Lai, Kon S.

In: Journal of International Economics, Vol. 34, No. 1-2, 02.1993, p. 181-192.

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