Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264622 
Authors: 
Year of Publication: 
1998
Series/Report no.: 
Working Paper No. 30
Publisher: 
Oesterreichische Nationalbank (OeNB), Vienna
Abstract: 
Although there has been much recent work on Purchasing Power Parity (PPP), neither univariate nor panel methods have produced strong rejections of unit roots in U.S. dollar real exchange rates for industrialized countries during the post-1973 period. We investigate the hypothesis that these non-rejections can be explained by one episode, the large appreciation and depreciation of the dollar in the 1980s, by developing unit root tests which account for this event and maintain long-run PPP. Using panel methods, we can reject the unit root null for those countries which adhere to the typical pattern of the dollar's rise and fall.
Document Type: 
Working Paper

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