Testing the law of one price under the fixed and flexible exchange rate systems

Khosrow Doroodian, Chulho Jung and Roy Boyd

Applied Economics Letters, 1999, vol. 6, issue 9, 613-616

Abstract: This paper examines if the law of one price holds under different exchange rate regimes and if a simultaneous relationship exists among prices of different countries. The findings show that prices in industrial countries are related, as suggested by the monetary approach. Confirming the law of one price, our results show relative price movements play a negligible role in removing a disequilibrium in the balance of payments. These findings provide supportive evidence for the purchasing power parity (PPP) doctrine under the floating exchange rate system but not under the fixed exchange rate system.

Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.informaworld.com/openurl?genre=article& ... 40C6AD35DC6213A474B5 (text/html)
Access to full text is restricted to subscribers.

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:taf:apeclt:v:6:y:1999:i:9:p:613-616

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/135048599352727

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().