1st Edition

Purchasing Power Parity and Real Exchange Rates





ISBN 9780415639651
Published October 13, 2012 by Routledge
226 Pages

USD $62.95

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Book Description

The term Purchasing Power Parity may date from the early twentieth century, when it was coined by the Swedish economist Gustav Cassel, but the underlying concept had been enjoying varying degrees of success since its development in sixteenth century Spain. Even towards the end of the twentieth century, and especially since the breakdown of the Bretton Woods system of fixed exchange rates, PPP and the stability of real exchange rates continued to be the subject of academic debate.

This volume brings together essays covering aspects of current thinking on Purchasing Power Parity, from the various ways in which to test for its existence, to its appearance in different economies around the world, to examinations of the explanations given when PPP does not appear to hold

This book was published as a special issue of Applied Financial Economics. The academic editor of this journal is Mark P. Taylor.

Table of Contents

1. Real exchange rates and Purchasing Power Parity: mean-reversion in economic thought  Mark P. Taylor  2. A simple test for PPP among traded goods  Philip Hans Franses and Dick van Dijk  3. Testing for Purchasing Power Parity using stationary covariates  Jomana Amara and David H. Papell  4. Explaining the persistence of deviations from PPP: a non-linear Harrod-Balassa-Samuelson effect?  Michael Sager  5. Testing for symmetry and proportionality in a European panel  Jerry Coakley and Stuart Snaith  6. Panel data tests of PPP: a critical overview  Guglielmo Maria Caporale and Mario Cerrato  7. PPP: a disaggregated view  Christoph Fischer  8. Purchasing Power Parity as a long-term memory process: evidence from Canada  Jean-Francois Villeneuve and Jagdish Handa  9. The Purchasing Power Parity puzzle: a sudden nonlinear perspective  Marcus Lahtinen  10. Exchange rate misalignment: a new test of long-run PPP based on cross-country data  Pan A. Yotopoulos and Yasuyuki Sawada  11. Purchasing Power Parity in economies in transition: evidence from Central and East European countries  Dimitrios Sideris  12. A century of Purchasing Power Parity: evidence from Canada and Australia  Mohammad S. Hasan  13. Purchasing Power Parity versus the EU in the Mediterranean countries  Mariam Camarero, Juan Carlos Cuestas and Javier Ordez  14. Purchasing Power Parity and real exchange rate behaviour in Africa  Joseph M. Kargbo  15. Structural changes and deviations from the Purchasing Power Parity within the euro area  Daniele Antonucci and Alessandro Girardi  16. The real exchange rate and the Purchasing Power Parity puzzle: further evidence  Sofiane H. Sekioua and Menelaos Karanasos

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Editor(s)

Biography

Mark Taylor is a leading international authority on open economy macroeconomics and international finance. He is Professor of International Finance and Macroeconomics at Warwick and a Managing Director of Barclays Global Investors (BGI).