Mclellan, Jacquelynne; Chakraborty, Debasish - In: Applied Economics Letters 4 (1997) 8, pp. 473-476
This paper tests for long-run PPP using two types of unit root tests, standard Dickey-Fuller (DF) or Augmented Dickey-Fuller (ADF) tests and Bayesian Sims tests. A problem with DF and ADF tests has been the low power of the tests; that is, such tests have difficulty in rejecting the random-walk...