Corbae, Dean; Ouliaris, Sam - In: The Economic Record 67 (1991) 196, pp. 26-33
If exchange rates and prices are integrated processes, standard econometric tests of the purchasing power parity (PPP) hypothesis may be biased toward rejection. This paper avoids this problem by using the Engle and Granger (1987) theory of cointegrated processes. If the absolute version of...