EconPapers    
Economics at your fingertips  
 

The black market exchange rate vs. the official rate in testing PPP: Which rate fosters the adjustment process?

Mohsen Bahmani-Oskooee () and Altin Tankui
Authors registered in the RePEc Author Service: Altin Tanku ()

Economics Letters, 2008, vol. 99, issue 1, 40-43

Abstract: In testing the purchasing power parity theory (PPP) researchers hardly pay attention to the speed with which the exchange rate adjusts to a change in relative prices. In this paper we show that the speed of adjustment is faster when the black market exchange rate is used in testing the PPP as compared to the official exchange rate. This could be another reason as to why central banks should unify the two rates.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (51) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165-1765(07)00196-6
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:99:y:2008:i:1:p:40-43

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-06-05
Handle: RePEc:eee:ecolet:v:99:y:2008:i:1:p:40-43