Purchasing Power Parity and Breaking Trend Functions in the Real Exchange Rate

Borradores de Economia
Número: 
564
Publicado: 
Clasificación JEL: 
C22, F31, F40, N70
Palabras clave: 
Purchasing power parity, unit root test, structural change, Balassa-Samuelson effect

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Diana Ricciulli-Marin, Mateo Uribe-Castro
Ana María Iregui-Bohórquez, Ligia Alba Melo-Becerra, María Teresa Ramírez-Giraldo, Jorge Leonardo Rodríguez Arenas
Francisco Javier Lasso-Valderrama, Carmiña Ofelia Vargas-Riaño

This paper provides evidence of long run purchasing power parity by performing a recently developed method to test for unit roots in the presence of structural breaks. Data consist of real exchange rate series for 20 countries including developed and deve