Purchasing power parity: Granger causality tests for the yen-dollar exchange rate
AbstractThe paper analyses the causality between the Japanese-US relative export prices and the yen-dollar exchange rate. It explains why the Japanese yen proved strong even during the economic slump of the 1990s. The paper suggests that the appreciation of the Japanese yen forced the Japanese enterprises into price reductions and productivity increases, which put a floor under the high level of the yen and thus initiated rounds of appreciation. This corresponds to the conjecture of a vicious (virtuous) circle of appreciation and price adaptation.
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Bibliographic InfoArticle provided by Elsevier in its journal Japan and the World Economy.
Volume (Year): 14 (2002)
Issue (Month): 4 (December)
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Web page: http://www.elsevier.com/locate/inca/505557
Other versions of this item:
- Gunther Schnabl & Dirk Baur, 2005. "Purchasing Power Parity: Granger Causality Tests for the Yen- Dollar Exchange Rate," International Finance 0506006, EconWPA.
- Schnabl, Gunther & Baur, Dirk, 2001. "Purchasing power parity: Granger causality tests for the yen-dollar exchange rate," TÃ¼binger DiskussionsbeitrÃ¤ge 213, University of Tübingen, School of Business and Economics.
- F31 - International Economics - - International Finance - - - Foreign Exchange
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