Analysis of Purchasing power parity with data for Macedonia
AbstractThis paper examines PPP parity theory with data for Macedonia. We test the empirical consensus in this literature that real exchange rates tend towards PPP in the very long run, also we use co-integration Engle-Granger method and error correction mechanism. The hypothesis we test that PPP theory holds in long run in the case of Macedonia, and this hypothesis is proven to be true.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 32023.
Date of creation: 01 Jun 2011
Date of revision: 2011
PPP; Exchange rate; Co-integration; unit root; stationarity;
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- Jane Bogoev & Sultanija Bojceva Terzijan & Balazs Egert & Magdalena Petrovska, 2008.
"Real Exchange Rate Dynamics in Macedonia: Old Wisdoms and New Insights,"
2008-01, National Bank of the Republic of Macedonia.
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- Robin Brooks & Kenneth Rogoff & Ashoka Mody & Nienke Oomes & Aasim M. Husain, 2004. "Evolution and Performance of Exchange Rate Regimes," IMF Occasional Papers 229, International Monetary Fund.
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