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Purchasing Power Parity Theory Revisited: Recent Evidence from US Dollar and Japanese Yen

Author

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  • Kishore G. Kulkarni

    (Metropolitan State College of Denver, USA)

  • Maiko Ishizaki

    (University of Denver, USA)

Abstract

This article is yet another simple test of the Purchasing Power Parity explanation of the exchange rate behaviour. We use the data of the US Dollar and Japanese Yen, and conclude that the PPP explanation has a substantial explanatory power for the behaviour of this exchange rate. The article recognizes the difference between real and absolute purchasing power parity, survey-related literature, and carries out econometric analysis of the PPP theory argument.

Suggested Citation

  • Kishore G. Kulkarni & Maiko Ishizaki, 2002. "Purchasing Power Parity Theory Revisited: Recent Evidence from US Dollar and Japanese Yen," Global Business Review, International Management Institute, vol. 3(1), pages 53-61, February.
    • Handle: RePEc:sae:globus:v:3:y:2002:i:1:p:53-61
    DOI: 10.1177/097215090200300104
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    References listed on IDEAS

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    1. Mark Rush & Steven Husted, 1985. "Purchasing Power Parity in the Long Run," Canadian Journal of Economics, Canadian Economics Association, vol. 18(1), pages 137-145, February.
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    Cited by:

    1. T. G. Saji, 2019. "Can BRICS Form a Currency Union? An Analysis under Markov Regime-Switching Framework," Global Business Review, International Management Institute, vol. 20(1), pages 151-165, February.
    2. Ekpeno L. Effiong, 2014. "Exchange Rate Dynamics and Monetary Fundamentals: A Cointegrated SVAR Approach for Nigeria," Global Business Review, International Management Institute, vol. 15(2), pages 205-221, June.
    3. Sawuya Nakijoba, 2018. "Determinants of Nominal Effective Exchange Rate in Uganda (2000-2017): A Vecm Approach," Applied Economics and Finance, Redfame publishing, vol. 5(5), pages 45-58, September.
    4. Helena Glebocki Keefe & Sujata Saha, 2022. "Threshold effects of openness on real and nominal effective exchange rates in emerging and developing economies," The World Economy, Wiley Blackwell, vol. 45(5), pages 1386-1408, May.
    5. Muhammad Kamran Khan & Jian-Zhou Teng & Muhammad Imran Khan, 2019. "Cointegration between macroeconomic factors and the exchange rate USD/CNY," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 5(1), pages 1-15, December.
    6. Syed Ali Raza & Sahar Afshan, 2017. "Determinants of Exchange Rate in Pakistan: Revisited with Structural Break Testing," Global Business Review, International Management Institute, vol. 18(4), pages 825-848, August.

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