A test of long-run purchasing power parity

Authors
Shively, PA
Citation
Pa. Shively, A test of long-run purchasing power parity, ECON LETT, 73(2), 2001, pp. 201-205
Citations number
20
Categorie Soggetti
Economics
Journal title
ECONOMICS LETTERS
ISSN journal
01651765 → ACNP
Volume
73
Issue
2
Year of publication
2001
Pages
201 - 205
Database
ISI
SICI code
0165-1765(200111)73:2<201:ATOLPP>2.0.ZU;2-J
Abstract
There is a continuing debate whether purchasing power parity holds as a lon g-run equilibrium relationship. This note applies an exact small-sample, po intwise most powerful invariant unit root test to annual, long-horizon real exchange rates. This test finds clear and consistent evidence in favor of the true purchasing power parity relationship. (C) 2001 Elsevier Science B. V. All rights reserved.