EconPapers    
Economics at your fingertips  
 

Is the real effective exchange rate biased against the PPP hypothesis?

Daniel Ventosa-Santaulària, Frederick Wallace () and Manuel Gómez-Zaldívar

MPRA Paper from University Library of Munich, Germany

Abstract: We show that the use of the real effective exchange rate to test for purchasing power parity, as in Astorga (2012) and other studies, introduces a bias against finding evidence of PPP. The bias is illustrated using unit root tests applied to bilateral real rates.

Keywords: PPP; real effective exchange rate; stationarity (search for similar items in EconPapers)
JEL-codes: C22 F31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mon and nep-opm
Date: 2012-09-29
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/42488/1/MPRA_paper_42488.pdf original version (application/pdf)

Related works:
Journal Article: Is The Real Effective Exchange Rate Biased Against the PPP Hypothesis? (2014) Downloads
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:pra:mprapa:42488

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2018-12-16
Handle: RePEc:pra:mprapa:42488