On Cross-Country Differences in the Persistence of Real Exchange Rates

Arbeitspapier

Previous findings of long-run purchasing power parity come mainly from data for industrial countries, raising the issue of whether the results suffer sample-selection bias and exaggerate the general relevance of parity reversion. This study uncovers substantial cross-country heterogeneity in the persistence of deviations from parity. The results show that it is more likely, rather than less likely, to find parity reversion for developing countries than industrial countries. Although some persistence variations may partly reflect country differences in structural characteristics such as inflation experience and government spending, a considerable portion of those variations seems unaccounted for.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 218

Classification and Topics

• Classification: Wirtschaft
• Subject: Parity deviations ; cross-country persistence differences ; structural deterterminants

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cheung, Yin-Wong ; Lai, Kon S.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 1999

Further information

• Handle: http://hdl.handle.net/10419/75502