Home bias and deviations from purchasing power parity
AbstractEmpirical analysis has produced mixed results in testing for PPP. This note presents a simple model linking home bias towards home-produced tradable goods with deviations from absolute PPP. We show that this bias constitutes a significant determinant of PPP deviations.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 101 (2008)
Issue (Month): 1 (October)
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Web page: http://www.elsevier.com/locate/ecolet
PPP Home bias Panel data;
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