Chen, Shiu-Sheng; Engel, Charles - In: Pacific Economic Review 10 (2005) 1, pp. 49-72
Recently, Jean Imbs and colleagues have claimed that much of the purchasing power parity puzzle can be explained by 'aggregation bias'. This paper re-examines aggregation bias. It clarifies the meaning of aggregation bias and its applicability to the PPP puzzle; demonstrates that the size of the...