Home bias and deviations from purchasing power parity

Nikolaos Mylonidis

Economics Letters, 2008, vol. 101, issue 1, 38-40

Abstract: Empirical analysis has produced mixed results in testing for PPP. This note presents a simple model linking home bias towards home-produced tradable goods with deviations from absolute PPP. We show that this bias constitutes a significant determinant of PPP deviations.

Keywords: PPP; Home; bias; Panel; data (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:101:y:2008:i:1:p:38-40

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