Testing for Purchasing Power Parity: Econometric Issues and an Application to Developing Countries

Derick Boyd · Ron P Smith

53 citations0/0 files storedManchester School

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Monetary Policy and Economic Impact Global trade and economics Economic Growth and Productivity

Abstract

There is now a vast literature on testing purchasing power parity (PPP). Any test is conditional on a particular econometric specification which embodies a set of auxiliary assumptions. This paper reviews the issues involved in econometric specification and estimation in the time series and panel models used to test PPP. We start from a general model and then systematically examine the implicit restrictions that are imposed to obtain the standard procedures and discuss the implications of these procedures for estimation and inference. The issues are illustrated on data for a panel of 31 developing countries, 1966–90.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 53 citations exist upstream.

References

1999Pooled Mean Group Estimation of Dynamic Heterogeneous Panels 1995Estimating long-run relationships from dynamic heterogeneous panels 1996The Purchasing Power Parity Puzzle 2003The Economics of Exchange Rates 1995Exchange rates and fundamentals: Evidence on long-horizon predictability 1996Real Exchange Rate Behavior: The Recent Float from the Perspective of the Past Two Centuries 1997Transactions Costs and Nonlinear Adjustment in Real Exchange Rates; An Empirical Investigation 1996A panel project on purchasing power parity: Mean reversion within and between countries

Cited by

2002Monetary Transmission in Diverse Economies 2009Does the law of one price hold in China? Testing price convergence using disaggregated data 2002Keynes, Cocoa, and Copper 2002What does the UK's monetary policy and inflation experience tell us about the transmission mechanism?2001The Feldstein-Horioka puzzle is not as bad as you think 2000

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.