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Title: |
The Empirical Investigation of Long-Run
Purchasing Power Parity: The Case of Taiwan Exchange Rates |
| Author: |
Wu, Jyh-Lin |
| Author
Affiliation: |
National Chung
Cheng U |
| Source: |
International Economic Journal, Winter 1996, v. 10, no. 4, pp. 59-69 |
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Publication Date: |
Winter 1996 |
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Abstract: |
This paper empirically examines the
validity of the use of purchasing power parity in theoretical models by
testing for long-run equilibrium relationships between exchange rates
and consumer price indices. We do not impose a priori restriction upon
the cointegration vectors due to the possibility of measurement errors
in price indices. With Taiwan exchange rates and price indices,
empirical investigation supports PPP as a long-run equilibrium. |
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