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Dealing with Methodological Problems when Testing for Purchasing Power Parity: Evidence from Greece

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  • Sideris, Dimitrios

    ()
    (Bank of Greece and University of Ioannina)

Abstract

Problems faced by empirical studies of the purchasing power parity (PPP) hypothesis are: the choice between a multilateral and a bilateral approach, the choice of the appropriate price index and the problem of the simultaneous determination of prices and exchange rates. In the present paper, we analyse the implications of these problems when testing for PPP between Greece and its major trading partners during the recent floating exchange rate period. Long-run PPP is tested as a cointegrating relationship by applying the Johansen technique.

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Bibliographic Info

Article provided by Camera di Commercio di Genova in its journal Economia Internazionale / International Economics.

Volume (Year): 53 (2000)
Issue (Month): 3 ()
Pages: 389-407

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Handle: RePEc:ris:ecoint:0243

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Cited by:
  1. Dimitrios Sideris, 2008. "Real Exchange Rates over a Century: The Case of the Drachma/Sterling Rate, 1833-1939," Working Papers 66, Bank of Greece.
  2. Guneratne Banda Wickremasinghe, 2004. "The Sri Lankan Rupee and Purchasing Power Parity during the Current Floating Period," International Trade 0406005, EconWPA.

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