The Purchasing Power Parity puzzle: a studden nonlinear perspective

• Autores: Marcus Lahtinen
• Localización: Applied financial economics, ISSN 0960-3107, Vol. 16, Nº. 1-2, 2006 (Ejemplar dedicado a: Special Issue: Purchasing Power Parity and Real Exchange Rates), págs. 119-125
• Idioma: inglés
• DOI: 10.1080/09603100500390000
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• Resumen

  • The aim of this study is to construct a simple nonlinear model for the US dollar-euro real exchange rate. The nonlinear model considered allows the adjustment towards long-run equilibrium to be sudden as well as smooth. Is was found that the adjustment is sudden.