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Real exchange rates and Purchasing Power Parity: mean-reversion in economic thought

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  • Mark Taylor

Abstract

This study provides a critical review of the research literature on long-run Purchasing Power Parity and the stability of real exchange rates.

Suggested Citation

  • Mark Taylor, 2006. "Real exchange rates and Purchasing Power Parity: mean-reversion in economic thought," Applied Financial Economics, Taylor & Francis Journals, vol. 16(1-2), pages 1-17.
    • Handle: RePEc:taf:apfiec:v:16:y:2006:i:1-2:p:1-17
    DOI: 10.1080/09603100500390067
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    References listed on IDEAS

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    1. Jean Imbs & Haroon Mumtaz & Morten O. Ravn & Hélène Rey, 2005. "PPP Strikes Back: Aggregation And the Real Exchange Rate," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(1), pages 1-43.
    2. Parsley, David C., 2007. "Accounting for real exchange rate changes in East Asia," Journal of International Money and Finance, Elsevier, vol. 26(8), pages 1355-1377, December.
    3. Menzie Chinn & Louis Johnston, 1996. "Real Exchange Rate Levels, Productivity and Demand Shocks: Evidence from a Panel of 14 Countries," NBER Working Papers 5709, National Bureau of Economic Research, Inc.
    4. Rossi, Barbara, 2005. "Confidence Intervals for Half-Life Deviations From Purchasing Power Parity," Journal of Business & Economic Statistics, American Statistical Association, vol. 23, pages 432-442, October.
    5. Menzie D. Chinn, 2000. "The Usual Suspects? Productivity and Demand Shocks and Asia–Pacific Real Exchange Rates," Review of International Economics, Wiley Blackwell, vol. 8(1), pages 20-43, February.
    6. Ricardo, David, 1821. "On the Principles of Political Economy and Taxation," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number ricardo1821.
    7. Patrick K. Asea & Mr. Enrique G. Mendoza, 1994. "Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates?," IMF Working Papers 1994/060, International Monetary Fund.
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