IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpif/0508009.html
   My bibliography  Save this paper

Milkshake Prices, International Reserves, and the Mexican Peso

Author

Listed:
  • Thomas M Fullerton Jr

    (University of Texas at El Paso)

  • David Torres

    (El Paso Water Utilities)

Abstract

Menu prices from 13 international restaurant franchises that operate in both El Paso, Texas and Ciudad Juarez, Mexico are utilized to examine the behavior over time of the peso/dollar exchange rate. Parametric and non-parametric tests indicate that the price ratio alone provides a biased estimator for the exchange rate. In addition to the multi-product price ratio, the empirical analysis also incorporates interst rate parity and balance of payment variables. The combination of unique microeconomic sample data with national macroeconomic variables illustrates one manner in which border economies provide information regarding the interplay of financial markets between Mexico and the United States.

Suggested Citation

  • Thomas M Fullerton Jr & David Torres, 2005. "Milkshake Prices, International Reserves, and the Mexican Peso," International Finance 0508009, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpif:0508009
    Note: Type of Document - doc; pages: 24
    as

    Download full text from publisher

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/if/papers/0508/0508009.doc
    Download Restriction: no

    Other versions of this item:

    More about this item

    Keywords

    Purchasing Power Parity; Exchange Rates; border Economies;

    JEL classification:

    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpif:0508009. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA). General contact details of provider: https://econwpa.ub.uni-muenchen.de .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.