Series: IMF Working Papers
Author(s): Karl Habermeier , and Mario Mesquita
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 April 1999
Keywords: Exchange Rates, Panel Data Econometrics, Purchasing Power Parity (PPP), Balassa-Samuelson Effect, Terms of Trade, exchange rate, real exchange rates, real exchange rate, inflation
Long-run movements of real exchange rates are studied using a panel data set comprising 51 economies. The purchasing power parity hypothesis (PPP) is examined first using unit root tests. It is found that PPP does...