Is The Real Effective Exchange Rate Biased Against the PPP Hypothesis?
We show that the use of the real effective exchange rate to test for purchasing power parity, as in Astorga (2012) and other studies, is subject to a problem that biases tests against finding evidence of PPP. The problem is illustrated using Astorga´s data on six Latin American countries.
Volume (Year): 34 (2014)
Issue (Month): 1 ()
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