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Testing for nominal convergence in the Central American area: evidence from panel data unit-root tests

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  • Jean-Francois Hoarau
  • Stephane Blancard
  • Philippe Jean-Pierre

Abstract

Inflation convergence between the Central American Area and the United States is investigated using both recent homogeneous and heterogeneous panel data unit-root methods. Strong rejections of unit-root hypothesis are found, and therefore evidence of Purchasing Power Parity, in the Central American countries for the 1981:1-2005:4 period. Then by considering the nominal convergence criterion, the dollarization system seems to be suited to this region.

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  • Jean-Francois Hoarau & Stephane Blancard & Philippe Jean-Pierre, 2009. "Testing for nominal convergence in the Central American area: evidence from panel data unit-root tests," Applied Economics Letters, Taylor & Francis Journals, vol. 16(11), pages 1171-1174.
  • Handle: RePEc:taf:apeclt:v:16:y:2009:i:11:p:1171-1174
    DOI: 10.1080/13504850701367148
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    References listed on IDEAS

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    Cited by:

    1. Hałka, Aleksandra & Leszczyńska-Paczesna, Agnieszka, 2019. "Price convergence in the European Union – What has changed?," Economic Modelling, Elsevier, vol. 79(C), pages 226-241.

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