Purchasing Power Parity Revisited

50 Pages Posted: 8 Jan 2004

See all articles by Simon Sosvilla-Rivero

Simon Sosvilla-Rivero

UCM Institute for Economic Analysis

Emma Garcia

Foundation for Applied Economic Research (FEDEA)

Date Written: December 2003


This paper presents a selective survey on some recent empirical attempts to test the validity of Purchasing Power Parity (PPP) to explain exchange-rate movements in the main currencies, as well as the econometric methodology used in such tests. Finally, we offer some encouraging results regarding the forecastability of exchange rate using PPP.

Keywords: Exchange rates, Purchasing Power parity, Cointegration

JEL Classification: F31, C32, C33

Suggested Citation

Sosvilla-Rivero, Simon and Garcia, Emma, Purchasing Power Parity Revisited (December 2003). Available at SSRN: https://ssrn.com/abstract=477446 or http://dx.doi.org/10.2139/ssrn.477446

Simon Sosvilla-Rivero (Contact Author)

UCM Institute for Economic Analysis ( email )

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HOME PAGE: http://www.ucm.es/info/ecocuan/ssr/

Emma Garcia

Foundation for Applied Economic Research (FEDEA) ( email )

Jorge Juan 46
Madrid, 28001

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