Appendix for the PPP hypothesis and structural breaks: the case of Mexico

Manuel Gómez-Zaldívar, Daniel Ventosa-Santaulària and Frederick Wallace

MPRA Paper from University Library of Munich, Germany

Abstract: This appendix presents an extended explanation for our finding of mean reversion of the real exchange rate to a shifting mean using monthly data for Mexico, 1969-2010. Because such shifts coincide with trade liberalization in Mexico, we conclude that changes in the tradable/nontradable goods composition of the price index used in the empirical estimations caused the mean shifts.

Keywords: Purchasing power parity; mean reversion; mean shifts; Mexico (search for similar items in EconPapers)
JEL-codes: C22 F31 (search for similar items in EconPapers)
Date: 2012-09-04
New Economics Papers: this item is included in nep-opm
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Citations: View citations in EconPapers (2)

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