Yotopoulos, Pan A.; Sawada, Yasuyuki - Center for International Research on the Japanese … - 2005
We formulate and implement a new empirical procedure to examine the validity of PPP in the long-run for 153 countries by using the familiar cross-country data set of Heston, Summers, and Aten (2002). Unlike the existing studies that rely on mean reversion of real exchange rates, we explicitly...