| dc.description.abstract | Recent research has found evidence that supports the purchasing power parity
(PPP) condition in developed countries using very long-span data, while evidence
for developing countries is almost nonexistent. This paper tries to fulfill
this void by testing the validity of PPP as a long run equilibrium condition for
Chile, using data, since its birth as a nation, developed by Díaz, Lüders and
Wagner (2003). A battery of unit-root and cointegration tests is applied. We found
evidence in favor of PPP. Results are robust to changes in the domestic price
index, to changes in the sample period, and to the econometric technique applied. | |
