Bahmani-Oskooee, Mohsen; Hegerty, Scott W.; Kutan, Ali M. - In: The Quarterly Review of Economics and Finance 49 (2009) 3, pp. 1001-1008
While the use of real effective exchange rates in stationarity tests of purchasing power parity (PPP) avoids the problems created using bilateral rates, these rates are often constructed using trade shares that are fixed at a single base year. This method fails to take into account the fact that...