The Law of One Price: Conditional Convergence Evidence from Disaggregated Data

Journal article | Zeitschriftenartikel

This paper contributes to the literature on the Law of One Price (LOP) and absolute Purchasing Power Parity (PPP) in two ways. First, it uses a novel set of PPP data from the International Comparison Programme for OECD countries and 195 internationally comparable products from 1980 to 1996. Second, it derives and applies a test of conditional sigma-convergence, which does not require long time spans or high frequency data. Between 1990 and 1996 for 10 out of 23 countries a significant reduction in the variance of the deviations from LOP is found for tradeables, but none in case of non-tradeables. For the former, the deviations from LOP close out at half-lives between 2.2 and 6.3 years. However, there are also persistent country-specific deviations from LOP parities.

Object Details

• Extent: Seite(n): 3345-3357
• Language: Englisch
• Notes: Status: Postprint; begutachtet (peer reviewed)

References and Relationships

• Bibliographic citation: Applied Economics, 41(26)

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Pfaffermayr, Michael
• Event: Veröffentlichung
• (when): 2009

Further information

• DOI: https://doi.org/10.1080/00036840701426584
• URN: urn:nbn:de:0168-ssoar-240761
• Rights: GESIS - Leibniz-Institut für Sozialwissenschaften. Bibliothek Köln
• Last update: 21.06.2024, 4:27 PM CEST