The Factor Specificity and the Exchange Rate Theory of Purchasing Power Parity: An Extension of the Jones-Purvis Model

Juan Antonio García-Cebro ()
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Juan Antonio García-Cebro: University of A Coruña, Postal: Facultade de Ciencias Económicas e Empresariais, Departamento, da Analise Economica, Campus da Zapateira, A Coruña 15071, Spain

Journal of Economic Integration, 1998, vol. 13, 499-521

Abstract:

The focus of this paper is on the structural aspects of exchange rate determi - nation, generalizing the 1983 Jones-Purvis model. Specifically the Jones-Purvis model is extend to incorporate the concept of factor specificity. It is shown that deviations from purchasing power parity depend on, among other determi - nants, factor specificity. Furt h e rm o re, it examines the factor specificity as a short-medium run determinant of the behavior of exchange rates, in a frame - work where two countries are affected by a common external shock.

Keywords: Factor Specificity; the Exchange Rate Theory (search for similar items in EconPapers)
JEL-codes: F11 F31 (search for similar items in EconPapers)
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0084

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