REAL AND NOMINAL EFFECTIVE EXCHANGE-RATES FOR 22 LDCS - 1971 1-1990/4/

The International Monetary Fund constructs and publishes the real and nominal effective exchange rates, mostly for developed but not less de veloped countries. This paper employs a method of constructing real an d nominal effective exchange rate from the literature to produce quart erly data over the 1971-1990 period for 22 developing nations. As an a pplication, the stationarity of real effective exchange rates are dete rmined to establish the empirical validity of the Purchasing Power Par ity Theory (PPP). The results reveal that PPP fails to hold for most c ountries.