Exchange Rate Volatility and Purchasing Power Parity: Does Euro Make Any Difference?

This paper provides a new test of the purchasing power parity (PPP) and its relevance for the Euro. Principal component analysis (PCA) is employed to construct a pooled measure of inflation for 12 Euro-currency countries. This measure is used to test the PPP for Euro against three major currencies,...

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Bibliographic Details
Main Authors: Meher Manzur, Felix Chan
Format: Article
Language:English
Published: Universiti Utara Malaysia 2010-02-01
Series:International Journal of Banking and Finance
Online Access:https://www.scienceopen.com/document?vid=386ffcbe-0488-47cd-ba5c-4683aa368cf1