Evidence of Purchasing Power Parity for the Floating Regime Period

Claude Lopez

University of Cincinnati, Economics Working Papers Series from University of Cincinnati, Department of Economics

Abstract: This paper investigates the PPP hypothesis within industrialized countries for the post-Bretton Woods period via two panel unit root tests, the DF-GLS-SUR and the ADF-SUR tests, respectively developed by Lopez (2003) and Levin, Lin and Chu (2002). Both approaches allow for data specific serial and contemporaneous correlation. The results lead to two major conclusions. First, by comparing the two test outcomes, we show the importance of the test power on PPP evidence. Then focusing on the results obtained via the DF-GLS-SUR test, we provide reliably strong evidence of PPP for the floating regime period.

Pages: 16 pages
Date: 2004-05, Revised 2006-03
New Economics Papers: this item is included in nep-ets and nep-ifn
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Related works:
Journal Article: Evidence of purchasing power parity for the floating regime period (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:cin:ucecwp:2004-01

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