Colombian Purchasing Power Parity Analysed Using a Framework of Multivariate Cointegration

Peter Rowland; Hugo Oliveros

Borradores de Economia

Number:

252

Published:

Sunday, 1 June 2003

Classification JEL:

C33, F21, F34

Keywords:

Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy

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This paper tests for purchasing power parity (PPP) between Colombia and its main trading partners using the Johansen framework of multivariate cointegration. The tests shows that PPP does not hold in the strong sense, but a clear purchasing power relation