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Real disturbances, relative prices and purchasing power parity [PDF]

open access: possibleJournal of Macroeconomics, 1996
Abstract This paper tests a modified version of purchasing power parity which hypothesizes that real shocks that alter equilibrium relative prices between tradables and non-tradables are responsible for the deviations from purchasing power parity. Using cointegration/error-correction methods and quarterly data from the post Bretton Woods period, we ...
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The Doctrine of Relative Purchasing Power Parity Re‐examined

Journal of Economic Studies, 1993
Investigates the doctrine of Relative Purchasing Power Parity. Mixed evidence is found supporting the concept when using a method analogous to that used by Lucas in testing the quantity theory of money. Relative Purchasing Power Parity is not consistently rejected in the long run between Canada and the United States and between Japan and the United ...
Elsworth D. Beach   +2 more
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The linkage between relative population growth and purchasing power parity

International Journal of Development Issues, 2011
PurposeThe aim of this paper is to examine the relationship between relative population growth and purchasing power parity (PPP) exchange rate for a panel of 80 countries.Design/methodology/approachPanel unit root and panel cointegration tests have been used to investigate the above relationship over the period of 1951‐2000.FindingsThe empirical ...
Hassan, K., Salim, Ruhul
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Internal Relative Price Stationarity in Long‐Run Purchasing Power Parity

Review of International Economics, 1997
This study demonstrates that the joint relationship among domestic traded‐goods prices, dometic nontraded‐goods prices, foreign traded‐goods prices, and foreign nontraded‐goods prices is important to understanding rejections or confirmations of long‐run PPP.
Janice Boucher Breuer   +1 more
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Testing the relative purchasing power parity hypothesis: the case of Korea

Applied Economics, 2015
ABSTRACTThis study examines the relative purchasing power parity (PPP) hypothesis using the data from the Korean won–US dollar and the Korean won–Japanese yen foreign exchange markets. We extract proxies for inflation from stock market returns of Korea, the United States and Japan based on the method used by Chowdhry, Roll and Xia in 2005.
Hyein Shim   +3 more
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Purchasing power parity and the theory of general relativity: the first tests

Journal of International Money and Finance, 2005
We implement novel tests of general relative purchasing power parity (PPP), defined as a long-run unit elasticity of the nominal exchange rate with respect to relative national prices, allowing for potentially permanent real exchange rate shocks. The finite-sample properties of the estimators used are analyzed through Monte Carlo analysis, allowing for
Jerry Coakley   +3 more
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Doctrine of relative purchasing power parity under fixed and flexible exchange rates reconsidered

The International Trade Journal, 1995
The doctrine of relative purchasing power parity during periods of fixed and flexible exchange rates is investigated.
Elsworth D. Beach   +2 more
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Relative price changes and deviations from purchasing power parity

Journal of Banking & Finance, 1979
Abstract During recent years, exchange rate fluctuations have exceeded variation in price indices. As a result, a number of theories have been developed to explain the apparent ‘overshooting’ of the exchange rate. The purpose of this paper is to argue that such elaborate extensions may be unnecessary, because the law of one price is more robust than ...
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