Appendix for the PPP hypothesis and structural breaks: the case of Mexico
Daniel Ventosa-Santaulària and
Frederick Wallace ()
MPRA Paper from University Library of Munich, Germany
This appendix presents an extended explanation for our finding of mean reversion of the real exchange rate to a shifting mean using monthly data for Mexico, 1969-2010. Because such shifts coincide with trade liberalization in Mexico, we conclude that changes in the tradable/nontradable goods composition of the price index used in the empirical estimations caused the mean shifts.
Keywords: Purchasing power parity; mean reversion; mean shifts; Mexico (search for similar items in EconPapers)
JEL-codes: C22 F31 (search for similar items in EconPapers)
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