Validity of the purchasing power parity theory in the euro area

The aim of this paper is to provide evidence concerning the validity of the purchasing power parity (PPP) in the euro area. By applying unit root tests we find evidence of the PPP for the panel of the 12 euro area countries over the period 1970 – 2017, more concretely for the real exchange rates of...

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Bibliographic Details
Main Authors: Grochová, Ladislava Issever, Plecitá, Klára
Format: Conference Proceeding
Language:English
Subjects:
Economic models
Euro
Eurozone
Parity
Purchasing power parity
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Summary:The aim of this paper is to provide evidence concerning the validity of the purchasing power parity (PPP) in the euro area. By applying unit root tests we find evidence of the PPP for the panel of the 12 euro area countries over the period 1970 – 2017, more concretely for the real exchange rates of Austria, the Belgium-Luxembourg Union and Ireland.
ISSN:0094-243X
1551-7616
DOI:10.1063/1.5114419