Reconsidering Convergence Rate to Purchasing Power Parity: Structural Error Correction Model Approach
نویسنده
چکیده
This paper estimates the speed of the adjustment coefficient in structural error correction models (ECM) and employs a system method for real exchange rates with Hansen and Sargent’s (1980, 1982) IV methods. Empirical results show that the half-lives of purchasing power parity deviations are less than one year in most cases. JEL classification: C22, F31, F41
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