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Purchasing Power Parity Revisited

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  • Simón Sosvilla-Rivero
  • Emma García

Abstract

This paper presents a selective survey on some recent empirical attempts to test the validity of Purchasing Power Parity (PPP) to explain exchange-rate movements in the main currencies, as well as the econometric methodology used in such tests. Finally, we offer some encouraging results regarding the forecastability of exchange rate using PPP.

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Paper provided by FEDEA in its series Working Papers with number 2003-20.

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Handle: RePEc:fda:fdaddt:2003-20

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