Colombian Purchasing Power Parity Analysed Using a Framework of Multivariate Cointegration

Borradores de Economia
Número: 
252
Publicado: 
Clasificación JEL: 
C33, F21, F34
Palabras clave: 
Multivariate Cointegration
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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