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Girard  (p. 9-22)

Cooper (p. 23-32)

Kunz-Osborne (p. 33-41)

Coulmas-Law (p.42-46)

Stasio (p. 47-56)

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JOURNAL OF APPLIED BUSINESS AND ECONOMICS

Testing Purchasing Power Parity in the Long-Run

Author(s): Ilona Shiller

Citation: Ilona Shiller, (2013) "Testing Purchasing Power Parity in the Long-Run," Journal of Applied Business and Economics, Vol. 14, Iss. 1, pp. 11-20

Article Type: Research paper

Publisher: North American Business Press

Abstract:

This paper studies the validity of the long-run purchasing parity hypothesis. The five currencies of

interest in this study are the U.S. dollar, the U.K. pound sterling, the German mark, the French franc, and

the Japanese yen. I attempt two approaches to test the long-run PPP hypothesis. First, I test for unit roots

of the real exchange rates themselves. Second, I examine the cointegration relationship between the

foreign dollar price level and the Canadian price level. Results show that the long-run PPP hypothesis

cannot be confirmed.