Persistent gaps between purchasing power parities and exchange rates under the law of one price: a puzzle (partly) explained?
Author
Abstract
Suggested Citation
Download full text from publisher
References listed on IDEAS
- Christian Dreger & Konstantin Kholodilin & Kirsten Lommatzsch & JiÅà SlaÄálek & Przemyslaw Wozniak, 2008.
"Price Convergence in an Enlarged Internal Market,"
Eastern European Economics, Taylor & Francis Journals, vol. 46(5), pages 57-68, September.
- Christian Dreger & Konstantin Kholodilin & Kirsten Lommatzsch & Jirka Slacalek & Przemyslaw Wozniak, 2007. "Price Convergence in the Enlarged Internal Market," CASE Network Reports 0076, CASE-Center for Social and Economic Research.
- Christian Dreger & Konstantin Kholodilin & Kirsten Lommatzsch & Jirka Slacalek & Przemyslaw Wozniak, 2007. "Price convergence in the enlarged internal market," European Economy - Economic Papers 2008 - 2015 292, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Christian Dreger & Konstantin Kholodilin & Kirsten Lommatzsch & Jiri Slacalek & Przemyslaw Wozniak, 2007. "Price Convergence in the Enlarged Internal Market," Discussion Papers of DIW Berlin 730, DIW Berlin, German Institute for Economic Research.
- Mario J. Crucini & Chris I. Telmer & Marios Zachariadis, 2005.
"Understanding European Real Exchange Rates,"
American Economic Review, American Economic Association, vol. 95(3), pages 724-738, June.
- Mario Crucini & Chris Telmer & Marios Zachariadis, "undated". "Understanding European Real Exchange Rates," GSIA Working Papers 227, Carnegie Mellon University, Tepper School of Business.
- Mario J. Crucini & Chris I. Telmer & Marios Zachariadis, 2001. "Understanding European Real Exchange Rates," Vanderbilt University Department of Economics Working Papers 0120, Vanderbilt University Department of Economics.
- Balázs Égert, 2007.
"Real Convergence, Price Level Convergence and Inflation Differentials in Europe,"
Working Papers
138, Oesterreichische Nationalbank (Austrian Central Bank).
- Balázs Egert, 2007. "Real Convergence, Price Level Convergence and Inflation Differentials in Europe," CESifo Working Paper Series 2127, CESifo.
- Balazs Egert, 2007. "Real Convergence, Price Level Convergence and Inflation Differentials in Europe," William Davidson Institute Working Papers Series wp895, William Davidson Institute at the University of Michigan.
- Clements, Kenneth W & Selvanathan, Saroja, 1994.
"Understanding Consumption Patterns,"
Empirical Economics, Springer, vol. 19(1), pages 69-110.
- K.W. Clements & S. Selvanathan, 1992. "Understanding Consumption Patterns," Economics Discussion / Working Papers 92-13, The University of Western Australia, Department of Economics.
- Méjean, Isabelle & Schwellnus, Cyrille, 2009.
"Price convergence in the European Union: Within firms or composition of firms?,"
Journal of International Economics, Elsevier, vol. 78(1), pages 1-10, June.
- Isabelle Méjean & Cyrille Schwellnus, 2009. "Price Convergence in the European Union: Within Firms or Composition of Firms?," Working Papers hal-00354190, HAL.
- Isabelle Méjean & Cyrille Schwellnus, 2009. "Price Convergence in the European Union: Within Firms or Composition of Firms?," Working Papers 2009-03, CEPII research center.
- Leon Podkaminer, 2004.
"Why is food cheaper in rich (European) countries?,"
BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 57(230), pages 297-327.
- Leon Podkaminer, 2004. "Why is food cheaper in rich (European) countries?," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 57(230), pages 297-327.
- Leon Podkaminer, 2005. "Why Is Food Cheaper in Rich (European) Countries?," wiiw Research Reports 322, The Vienna Institute for International Economic Studies, wiiw.
- Alan M. Taylor & Mark P. Taylor, 2004.
"The Purchasing Power Parity Debate,"
Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 135-158, Fall.
- Taylor, Mark & Taylor, Alan M., 2004. "The Purchasing Power Parity Debate," CEPR Discussion Papers 4495, C.E.P.R. Discussion Papers.
- Alan M. Taylor & Mark Taylor, 2004. "The Purchasing Power Parity Debate," Working Papers 133, University of California, Davis, Department of Economics.
- Alan M. Taylor & Mark P. Taylor, 2004. "The Purchasing Power Parity Debate," NBER Working Papers 10607, National Bureau of Economic Research, Inc.
- G. M. Grossman & K. Rogoff (ed.), 1995. "Handbook of International Economics," Handbook of International Economics, Elsevier, edition 1, volume 3, number 3.
- Leon Podkaminer, 1999. "Non-tradable Goods and Deviations Between Purchasing Power Parities and Exchange Rates: Evidence from the 1990 European Comparison Project," Studies in Economic Transition, in: Hubert Gabrisch & Rüdiger Pohl (ed.), EU Enlargement and its Macroeconomic Effects in Eastern Europe, chapter 3, pages 62-93, Palgrave Macmillan.
- Balázs Égert, 2007. "Real Convergence, Price Level Convergence and Inflation in Europe," Working Papers 267, Bruegel.
- Maurice Obstfeld & Kenneth Rogoff, 2001.
"The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?,"
NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 339-412,
National Bureau of Economic Research, Inc.
- Maurice Obstfeld & Kenneth Rogoff & Ben Bernanke & Kenneth Rogoff, "undated". "The Six Major Puzzles in International Macroeconomics: Is there a Common Cause?," Working Paper 32326, Harvard University OpenScholar.
- Maurice Obstfeld & Kenneth Rogoff, 2001. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," International Trade 0012003, University Library of Munich, Germany.
- Maurice Obstfeld & Kenneth Rogoff, 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Working Papers 7777, National Bureau of Economic Research, Inc.
- Obstfeld, Maurice & Rogoff, Kenneth, 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," Department of Economics, Working Paper Series qt0sx02651, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Maurice Obstfeld and Kenneth Rogoff., 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," Center for International and Development Economics Research (CIDER) Working Papers C00-112, University of California at Berkeley.
- Obstfeld, Maurice & Rogoff, Kenneth, 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," Center for International and Development Economics Research, Working Paper Series qt0sx02651, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
- Burstein, Ariel T. & Neves, Joao C. & Rebelo, Sergio, 2003.
"Distribution costs and real exchange rate dynamics during exchange-rate-based stabilizations,"
Journal of Monetary Economics, Elsevier, vol. 50(6), pages 1189-1214, September.
- Ariel T. Burstein & Joao C. Neves & Sergio Rebelo, 2000. "Distribution Costs and Real Exchange Rate Dynamics During Exchange-Rate-Based Stabilizations," RCER Working Papers 473, University of Rochester - Center for Economic Research (RCER).
- Rebelo, Sérgio & Neves, Joao C & Burstein, Ariel Tomas, 2001. "Distribution Costs and Real Exchange Rate Dynamics During Exchange-Rate-Based Stabilization," CEPR Discussion Papers 2944, C.E.P.R. Discussion Papers.
- Ariel T. Burstein & Joao C. Neves & Sergio Rebelo, 2000. "Distribution Costs and Real Exchange Rate Dynamics During Exchange-Rate-Based-Stabilizations," NBER Working Papers 7862, National Bureau of Economic Research, Inc.
- Lucio Sarno, 2005.
"Viewpoint: Towards a solution to the puzzles in exchange rate economics: where do we stand?,"
Canadian Journal of Economics, Canadian Economics Association, vol. 38(3), pages 673-708, August.
- Lucio Sarno, 2005. "Viewpoint: Towards a solution to the puzzles in exchange rate economics: where do we stand?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(3), pages 673-708, August.
- James E. Anderson & Eric van Wincoop, 2004.
"Trade Costs,"
Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
- James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Boston College Working Papers in Economics 593, Boston College Department of Economics.
- James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc.
- Hisham Foad, 2010. "Europe Without Borders? The Effect of the Euro on Price Convergence," International Regional Science Review, , vol. 33(1), pages 86-111, January.
- Podkaminer, Leon, 1982. "Estimates of the Disequilibria in Poland's Consumer Markets, 1965-1978," The Review of Economics and Statistics, MIT Press, vol. 64(3), pages 423-431, August.
- Campa, Jose Manuel & Gonzalez Minguez, Jose M., 2006.
"Differences in exchange rate pass-through in the euro area,"
European Economic Review, Elsevier, vol. 50(1), pages 121-145, January.
- Campa, Jose M. & Gonzalez, Jose M., 2002. "Differences in exchange rate pass-through in the euro area," IESE Research Papers D/479, IESE Business School.
- José Manuel Campa & Jose M. González Mínguez, 2002. "Differences in exchange rate pass-through in the euro area," Working Papers 0219, Banco de España.
- Campa, José Manuel & González Mìnguez, Jose Manuel, 2004. "Differences in Exchange Rate Pass-Through in the Euro Area," CEPR Discussion Papers 4389, C.E.P.R. Discussion Papers.
- Leon Podkaminer, 2003.
"Analytical notes on the Balassa-Samuelson effect,"
Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 56(226), pages 207-221.
- Leon Podkaminer, 2003. "Analytical notes on the Balassa-Samuelson effect," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 56(226), pages 207-221.
- Joanna Wolszczak-Derlacz & Rembert De Blander, 2009. "Price convergence in the European Union and in the New Member States," Bank i Kredyt, Narodowy Bank Polski, vol. 40(2), pages 37-59.
- De Gregorio, Jose & Giovannini, Alberto & Wolf, Holger C., 1994.
"International evidence on tradables and nontradables inflation,"
European Economic Review, Elsevier, vol. 38(6), pages 1225-1244, June.
- Jose De Gregorio & Alberto Giovannini, 1993. "International Evidence on Tradables and Nontradable Inflation," NBER Working Papers 4438, National Bureau of Economic Research, Inc.
- Holger C. Wolf & Mr. Alberto Giovannini & Mr. Jose De Gregorio, 1994. "International Evidenceon Tradables and Nontradables Inflation," IMF Working Papers 1994/033, International Monetary Fund.
- Jose De Gregorio & Alberto Giovannini & Holger C. Wolf, 1993. "International Evidence on Tradables and Nontradables Inflation," Working Papers 93-17, New York University, Leonard N. Stern School of Business, Department of Economics.
- Leon Podkaminer, 2010. "Why Are Goods Cheaper in Rich Countries? Beyond the Balassa-Samuelson Effect," wiiw Working Papers 64, The Vienna Institute for International Economic Studies, wiiw.
- Alan M. Taylor & Mark P. Taylor, 2004.
"The Purchasing Power Parity Debate,"
Journal of Economic Perspectives,
American Economic Association, vol. 18(4), pages 135-158, Fall.
- Alan M. Taylor & Mark P. Taylor, 2004. "The Purchasing Power Parity Debate," NBER Working Papers 10607, National Bureau of Economic Research, Inc.
- Alan M. Taylor & Mark Taylor, 2004. "The Purchasing Power Parity Debate," Working Papers 46, University of California, Davis, Department of Economics.
- Taylor, Alan M. & Taylor, Mark P, 2004. "The Purchasing Power Parity Debate," CEPR Discussion Papers 4495, C.E.P.R. Discussion Papers.
- repec:onb:oenbwp:y::i:138:b:1 is not listed on IDEAS
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
Cited by:
- Leon Podkaminer, 2014. "Does trade drive global output growth?," Bank i Kredyt, Narodowy Bank Polski, vol. 45(4), pages 311-330.
- Leon Podkaminer, 2016.
"Has trade been driving global economic growth?,"
NBP Working Papers
251, Narodowy Bank Polski.
- Leon Podkaminer, 2016. "Has Trade Been Driving Global Economic Growth?," wiiw Working Papers 131, The Vienna Institute for International Economic Studies, wiiw.
Most related items
These are the items that most often cite the same works as this one and are cited by the same works as this one.- Fitzgerald, Doireann, 2008. "Can trade costs explain why exchange rate volatility does not feed into consumer prices?," Journal of Monetary Economics, Elsevier, vol. 55(3), pages 606-628, April.
- Lucio Sarno, 2005.
"Viewpoint: Towards a solution to the puzzles in exchange rate economics: where do we stand?,"
Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(3), pages 673-708, August.
- Lucio Sarno, 2005. "Viewpoint: Towards a solution to the puzzles in exchange rate economics: where do we stand?," Canadian Journal of Economics, Canadian Economics Association, vol. 38(3), pages 673-708, August.
- Choi, Jae Hoon & Song, Seongho, 2022. "Revisiting the PPP puzzle: Nominal exchange rate rigidity and region of inaction," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 78(C).
- Hai Long Vo & Duc Hong Vo, 2023. "The purchasing power parity and exchange‐rate economics half a century on," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 446-479, April.
- Qin, Duo, 2008.
"Uncover Latent PPP by Dynamic Factor Error Correction Model (DF-ECM) Approach: Evidence from Five OECD Countries,"
Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 2, pages 1-26.
- Duo Qin, 2006. "Uncover Latent PPP by Dynamic Factor Error Correction Model (DF-ECM) Approach: Evidence from Five OECD Countries," Working Papers 575, Queen Mary University of London, School of Economics and Finance.
- Qin, Duo, 2007. "Uncover Latent PPP by Dynamic Factor Error Correction Model (DF-ECM) Approach: Evidence from five OECD countries," Economics Discussion Papers 2007-29, Kiel Institute for the World Economy (IfW Kiel).
- Kenneth W Clements & Yihui Lan & Haiyan Liu & Long Vo, 2022. "The Icp, Ppp And Household Expenditure Patterns," Economics Discussion / Working Papers 22-18, The University of Western Australia, Department of Economics.
- Leon Podkaminer, 2010. "Real Convergence And Price Levels: Long‐Term Tendencies Versus Short‐Term Performance In The Enlarged European Union," Metroeconomica, Wiley Blackwell, vol. 61(4), pages 640-664, November.
- James E. Anderson & Eric van Wincoop, 2004.
"Trade Costs,"
Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
- James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Boston College Working Papers in Economics 593, Boston College Department of Economics.
- James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc.
- Lee, Inkoo & Park, Sangsoo, 2015.
"The law of one price revisited: How do goods market frictions generate large and volatile price deviations?,"
Journal of Macroeconomics, Elsevier, vol. 46(C), pages 71-80.
- Lee, Inkoo & Park, Sang Soo, 2015. "The law of one price revisited: How do goods market frictions generate large and volatile price deviations?," MPRA Paper 66470, University Library of Munich, Germany.
- Méjean, Isabelle, 2008.
"Can firms' location decisions counteract the Balassa-Samuelson effect?,"
Journal of International Economics, Elsevier, vol. 76(2), pages 139-154, December.
- Isabelle Méjean, 2006. "Can Firms’ Location Decisions Counteract the Balassa-Samuelson Effect?," Working Papers 2006-12, CEPII research center.
- Isabelle Méjean, 2008. "Can Firms' Location Decisions Counteract the Balassa-Samuelson Effect ?," Post-Print hal-00363067, HAL.
- Robertson, Raymond & Kumar, Anil & Dutkowsky, Donald H., 2014. "Weak-form and strong-form purchasing power parity between the US and Mexico: A panel cointegration investigation," Journal of Macroeconomics, Elsevier, vol. 42(C), pages 241-262.
- Martin Berka & Michael B. Devereux, 2010.
"What determines European real exchange rates?,"
Globalization Institute Working Papers
46, Federal Reserve Bank of Dallas.
- Berka, Martin & Devereux, Michael B., 2011. "What determines European real exchange rates?," Working Paper Series 18598, Victoria University of Wellington, School of Economics and Finance.
- Martin Berka & Michael B. Devereux, 2010. "What determines European real exchange rates?," CAMA Working Papers 2010-17, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Martin Berka & Michael B. Devereux, 2010. "What Determines European Real Exchange Rates?," NBER Working Papers 15753, National Bureau of Economic Research, Inc.
- Duo Qin & Marie Anne Cagas & Geoffrey Ducanes & Nedelyn Magtibay-Ramos & Pilipinas F. Quising, 2006.
"Measuring Regional Market Integration by Dynamic Factor Error Correction Model (DF-ECM) Approach - The Case of Developing Asia,"
Working Papers
565, Queen Mary University of London, School of Economics and Finance.
- Duo Qin & Marie Anne Cagas & Geoffrey Ducanes & Nedelyn Magtibay-Ramos & Pilipinas Quising, 2007. "Measuring Regional Market Integration by Dynamic Factor Error Correction Model (DF-ECM) Approach: The Case of Developing Asia," EcoMod2007 23900071, EcoMod.
- Pavlidis, Efthymios G. & Paya, Ivan & Peel, David A., 2011.
"Real exchange rates and time-varying trade costs,"
Journal of International Money and Finance, Elsevier, vol. 30(6), pages 1157-1179, October.
- E Pavlidis & I Paya & D Peel, 2009. "Real Exchange Rates and Time-Varying Trade Costs," Working Papers 600537, Lancaster University Management School, Economics Department.
- Sarno, Lucio & Valente, Giorgio, 2006. "Deviations from purchasing power parity under different exchange rate regimes: Do they revert and, if so, how?," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 3147-3169, November.
- Lee, Inkoo & Shin, Jonghyup, 2010.
"Real exchange rate dynamics in the presence of non-traded goods and transaction costs,"
Economics Letters, Elsevier, vol. 106(3), pages 216-218, March.
- Inkoo LEE & Jonghyup SHIN, 2008. "Real Exchange Rate Dynamics in the Presence of Nontraded Goods and Transaction Costs," Finance Working Papers 21964, East Asian Bureau of Economic Research.
- Hassan, Fadi, 2016. "The price of development: The Penn–Balassa–Samuelson effect revisited," Journal of International Economics, Elsevier, vol. 102(C), pages 291-309.
- Qin, Duo, 2008.
"Uncover Latent PPP by Dynamic Factor Error Correction Model (DF-ECM) Approach: Evidence from Five OECD Countries,"
Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 2, pages 1-26.
- Duo Qin, 2006. "Uncover Latent PPP by Dynamic Factor Error Correction Model (DF-ECM) Approach: Evidence from Five OECD Countries," Working Papers 575, Queen Mary University of London, School of Economics and Finance.
- Duo Qin, 2006. "Uncover Latent PPP by Dynamic Factor Error Correction Model (DF-ECM) Approach: Evidence from Five OECD Countries," Working Papers 575, Queen Mary University of London, School of Economics and Finance.
- Qin, Duo, 2007. "Uncover Latent PPP by Dynamic Factor Error Correction Model (DF-ECM) Approach: Evidence from five OECD countries," Economics Discussion Papers 2007-29, Kiel Institute for the World Economy (IfW Kiel).
- Lambelet, Jean-Christian & Mihailov, Alexander, 2005.
"The Triple-Parity Law,"
Economics Discussion Papers
8896, University of Essex, Department of Economics.
- Jean-Christian Lambelet & Alexander Mihailov, 2006. "The Triple-Parity Law," Computing in Economics and Finance 2006 33, Society for Computational Economics.
- Masao Ogaki & Sungwook Park, 2007. "Long-run real exchange rate changes and the properties of the variance of k-differences," Working Papers 07-05, Ohio State University, Department of Economics.
More about this item
Keywords
law of one price; purchasing power parities; exchange rates; general equilibrium modeling; cross-country systems of consumer demand functions;All these keywords.
JEL classification:
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F15 - International Economics - - Trade - - - Economic Integration
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- F31 - International Economics - - International Finance - - - Foreign Exchange
- O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
Statistics
Access and download statisticsCorrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbp:nbpbik:v:44:y:2013:i:4:p:333-352. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wojciech Burjanek (email available below). General contact details of provider: https://edirc.repec.org/data/nbpgvpl.html .
Please note that corrections may take a couple of weeks to filter through the various RePEc services.