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| Content Provider | Springer Nature Link |
|---|---|
| Author | Zhou, Su Bahmani Oskooee, Mohsen Kutan, Ali M. |
| Copyright Year | 2008 |
| Abstract | This paper examines the purchasing power parity (PPP) hypothesis for the post–Bretton Woods era including the period after the introduction of the euro. The study applies a new nonlinear unit root test to the bilateral real exchange rates (RERs) of both European and other industrial countries with the French franc and German mark (and the euro after 1998), as well as the US dollar as numeraire currencies. The results of the study provide stronger support for PPP than any earlier studies of bilateral PPP for industrial countries and suggest that (1) PPP tends to hold well within the European Union (EU) even before the adoption of the euro, (2) the evidence for PPP becomes more significant for both EU and non-EU countries when the sample period is extended to the euro era, and (3) convergence toward PPP between the EU countries, especially between the euro-area countries, tends to be nonlinear, while it is likely to be linear for the non-EU industrial countries. |
| Starting Page | 134 |
| Ending Page | 150 |
| Page Count | 17 |
| File Format | |
| ISSN | 16102878 |
| Journal | Weltwirtschaftliches Archiv |
| Volume Number | 144 |
| Issue Number | 1 |
| e-ISSN | 16102886 |
| Language | English |
| Publisher | Springer-Verlag |
| Publisher Date | 2008-01-01 |
| Publisher Place | Berlin, Heidelberg |
| Access Restriction | One Nation One Subscription (ONOS) |
| Subject Keyword | Purchasing power parity nonlinear stationarity real exchange rates single currency area International Economics Economics general |
| Content Type | Text |
| Resource Type | Article |
| Subject | Economics, Econometrics and Finance |
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