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PPP Persistence within Sectoral Real Exchange Rate Panels

In: Proceedings of the Conference on Human and Economic Resources

Author

Listed:
  • Christian J. Murray

    (Houston University)

  • Hatice Ozer-Balli

    (Houston University)

  • David H. Papell

    (Houston University)

Abstract

Recent studies about estimating half-lives of purchasing power parity argues that heterogeneity bias resulting from aggregating the real exchange rate across sectors is important and should be taken into account. However, they do not use appropriate techniques to measure persistence. In this paper we use the extended median-unbiased estimation method in panel context for each sector separately and calculate both point estimates and confidence intervals. We conclude that controlling for sectoral heterogeneity bias and small sample bias will not solve the PPP puzzle.

Suggested Citation

  • Christian J. Murray & Hatice Ozer-Balli & David H. Papell, 2006. "PPP Persistence within Sectoral Real Exchange Rate Panels," Papers of the Annual IUE-SUNY Cortland Conference in Economics, in: Oguz Esen & Ayla Ogus (ed.), Proceedings of the Conference on Human and Economic Resources, pages 388-398, Izmir University of Economics.
    • Handle: RePEc:izm:prcdng:200632
    as

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    File URL: http://eco.ieu.edu.tr/wp-content/proceedings/2006/0632.pdf
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    References listed on IDEAS

    as
    1. Jean Imbs & Haroon Mumtaz & Morten O. Ravn & Hélène Rey, 2005. "PPP Strikes Back: Aggregation And the Real Exchange Rate," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(1), pages 1-43.
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    Cited by:

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