We examine the Purchasing Power Parity (PPP) hypothesis using a unique panel of monthly data on black market exchange rates for twenty emerging market economies over the period 19973M1-1993M12. We apply a large number of recent heterogeneous panel unit root and cointegration tests. Panel unit...

Time series analysis is used to study the savings rate and its determinants. The real effective exchange rate is introduced as a new independent variable in the savings function. Borrowing constraints, the current account balance, real rate of interest, macroeconomic stability, and age...

This paper examines the empirical validity of Purchasing Power Parity (PPP) for certain large developing economies by using a panel unit root methodology. The test results show that a long run real exchange rate depreciation trend exists in certain developing countries. Without considering this...

Building on purchasing power parity theory, this paper proposes a new approach to forecasting exchange rates using the Big Mac data from The Economist magazine. Our approach is attractive in three aspects. Firstly, it uses easily-available Big Mac prices as input. These prices avoid several...

The aim of this article is to provide additional evidence on the fulfilment of the Purchasing Power Parity hypothesis in the so-called Mediterranean countries. In order to test for the empirical validity of such hypothesis, we have applied two types of unit root tests. The first group is due to...

A key objective of economic policy in Canada is to reduce the productivity gap with the United States. The development of appropriate policies to attain this goal requires a thorough understanding of the nature of the gap, including its industry dimensions. Unfortunately, statistical agencies do...

Emphasis on the interplay of real and monetary factors in determining exchange rates both in the short and long run.

This five-chapter introduction into international money and foreign exchange markets covers all the basics, theoretical, institutional, as well as empirical. After a brief review of the money market, we discuss the size and structure of the foreign exchange markets. This information is then used...

In this paper we examine the stability of the real exchange rate and the macroeconomic effects of alternative exchange-rate regimes, including currency union, on real exchange-rate behaviour. We focus on the Irish punt in order to exploit its diversity of experience over different nominal...

We test long¨Crun PPP within a general model of cointegration of linear and nonlinear form. Nonlinear cointegration is tested with rank tests proposed by Breitung (2001). We start with determining the order of integration of each variable in the model, applying relatively powerful DF¨CGLS...