Parity Reversion of Absolute Purchasing Power Parity

Nonlinear Adjustment Towards Purchasing Power Parity

The Purchasing Power Parity Debate

Our willingness to pay a certain price for foreign money must ultimately and essentially be due to the fact that this money possesses a purchasing power as against commodities and services in that country. On the other hand, when we offer so and so much of our own money, we are actually offering a purchasing power as against commodities and services in our own country. Our valuation of a foreig...

Some Evidence of Purchasing Power Parity

Empirical support for purchasing power parity is mixed with results dependent on the time frame and countries under examination, the methodology employed, attempts to control for aggregation bias in the data, and whether adjustments are made to account for productivity differences across nations. As a central component of macroeconomic thinking, purchasing power parity is battered and battle-wo...

Testing the Purchasing Power Parity in Pooled

In this paper we test the purchasing power parity for the post Bretton Woods period for 18 main industrial countries. As base currencies we use alternatively the Deutsche mark, the Japanese yen, and the US dollar. We employ error correction models for single countries and on the level of pooled equations allowing eecient inference on domestic and foreign price elasticities of nominal exchange r...

Purchasing power parity in Mexico since 1933

A new approach to cointegration developed by Enders et al. (Cointegration tests using instrumental variables with an example of the U.K. demand for money. Unpublished working paper. http://wenders.people.ua.edu/time-seriesmethods.html, 2008) is applied to long-span, high-frequency data to test for purchasing power parity in the Mexico–US real exchange rate. Overall the empirical results suggest...