Recent studies on general equilibrium models with transaction costs show that the dynamics of the real exchange rate are necessarily nonlinear. Our contribution to the literature on nonlinear price adjustment mechanisms is threefold. First, we model the real exchange rate by a Multi-Regime...

En el presente articulo se propone y emplea un metodo para el analisis de la convergencia relativa para regiones de la Republica Mexicana, en el periodo 1940-2009. Los resultados indican que todas las regiones analizadas convergen en este sentido hasta la decada de los ochenta. Sin embargo, a...

Analizamos la hipotesis de convergencia en el producto per capita para el caso de los municipios de Mexico en el periodo 1988- 2004. El analisis emplea la metodologia de Barro y Sala-i-Martin (1992) usada en la mayoria de los estudios empiricos que utilizan datos de seccion cruzada. Los...

The literature on spurious regressions has found that the t-statistic for testing the null of no relationship between two independent variables diverges asymptotically under a wide variety of nonstationary data generating processes for the dependent and explanatory variables. This paper...

We make use of a data set that is both long span and high frequency to test for purchasing power parity while allowing for a structural shift in the volatility of the Mexico-US bilateral real exchange rate. The Kim, Leybourne and Newbold (2002) unit root test, robust to changes in the innovation...

We make use of a data set that is both long span and high frequency to test for purchasing power parity while allowing for a structural shift in the volatility of the Mexico-US bilateral real exchange rate. The Kim, Leybourne and Newbold (2002) unit root test, robust to changes in the innovation...

This paper extends Gonzalo and Lee's (1998) results by studying the asymptotic and finite sample behavior of the Engle-Granger test for cointegration, under misspecification of the trend function in the form of neglected structural breaks. We allow breaks in level and slope of trend in both...

We study the phenomenon of spurious regression between two random variables when the generating mechanism for individual series follows a stationary process around a trend with (possibly) multiple breaks in its level and slope. We develop relevant asymptotic theory and show that spurious...