Fazio, G., McAdam, P. and MacDonald, R. (2007) Disaggregate real exchange rate behaviour. Open Economies Review, 18, pp. 389-404. (doi: 10.1007/s11079-007-9055-3)
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Abstract
In this paper, we re-examine the “PPP Puzzle” using sectoral disaggregated data. Specifically, we first analyse the mean reversion speeds of real exchange rates for a number of different sectors in 11 industrial economies and then focus on relating these rates to variables identified in the literature as key determinants of CPI-based real exchange rates, namely: the trade balance, productivity and the mark up. In particular, we seek to understand to what extent the relationships existing at the aggregate level are borne out at the disaggregate level. We believe that this analysis can help shed light on the PPP puzzle.
| Item Type: | Articles |
|---|---|
| Status: | Published |
| Refereed: | Yes |
| Glasgow Author(s) Enlighten ID: | MacDonald, Professor Ronald |
| Authors: | Fazio, G., McAdam, P., and MacDonald, R. |
| College/School: | College of Social Sciences > Adam Smith Business School > Economics |
| Journal Name: | Open Economies Review |
| Publisher: | Springer |
| ISSN: | 0923-7992 |
| ISSN (Online): | 1573-708X |
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