Chen, Lein-Lein; Choi, Seungmook; Devereux, John - In: Journal of Money, Credit and Banking 38 (2006) 1, pp. 229-244
We examine the relationship between the relative price of nontradables and real exchange rate movements for fixed exchange rate regimes. Using BLS CPI data, we show that purchasing power parity holds strongly for tradables across U.S. regions. As a result, nontradables play a central role in...