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Absolute purchasing power parity in industrial countries

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  • Zhang, Zhibai
  • Bian, Zhicun

Abstract

Different from popular studies that focus on relative purchasing power parity, we study absolute purchasing power parity (APPP) in 21 main industrial countries. Three databases are used. Both the whole period and the sub-period are analyzed. The empirical proof shows that the phenomenon that APPP holds is common, and the phenomenon that APPP does not hold is also common. In addition, some country pairs and the pooled country data indicate that the nearer the GDPPs of two countries are, the more valid APPP between the two countries is.

Suggested Citation

  • Zhang, Zhibai & Bian, Zhicun, 2015. "Absolute purchasing power parity in industrial countries," MPRA Paper 66241, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:66241
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Absolute purchasing power parity; Real exchange rate; Coefficient restriction test;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance

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