search query: @author Kendall, J. / total: 3
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| Author: | Feenstra, R. Kendall, J. |
| Title: | Passthrough of exchange rates and purchasing power parity |
| Journal: | Journal of International Economics
1997 : AUG, VOL. 43:1/2, p. 237-261 |
| Index terms: | EXCHANGE RATES ECONOMICS PURCHASING POWER |
| Language: | eng |
| Abstract: | In this paper the authors develop and test two hypotheses about purchasing power parity (PPP). The first is that changes in the price of traded goods relative to domestic substitutes will affect the PPP relation due to the partial pass-through of exchange rates. The second is that PPP should hold on forward rather than spot exchange rates, due to hedging by firms, which implies that the interest rate differential should enter the PPP relation for spot rates. |
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