Aggregate price indexes, cointegration, and tests of the purchasing power parity hypothesis

Paul Johnson

Economics Letters, 1991, vol. 36, issue 3, 305-309

Abstract: In this paper I show that cointegration tests of PPP using aggregate price indexes are not always robust to changes in relative prices. I offer a method of gauging the importance of these effects and find them to be unimportant in recent rejections of PPP.

Date: 1991
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:36:y:1991:i:3:p:305-309

DOI: 10.1016/0165-1765(91)90038-M

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