integration lowers national price levels. Thus, the paper proposes a novel argument to rationalize systematic deviations from PPP …

Purchasing power parity (PPP) is one of the most important, but empirically controversial theories in international … macroeconomics. Although many researchers believe that some variant of PPP holds in the long run, there are diverse empirical results … regarding the PPP hypothesis. We examine the PPP hypothesis from an alternate point of view: We investigate the possibility of …