Long-run purchasing power parity in the 1920s

摘要: Abstract This paper presents an empirical analysis of long-run purchasing power parity (PPP) during the 1920s float, using recently developed methodology on cointegration economic time series. Our results are generally supportive PPP as a equilibrium condition which exchange rates tended to converge over period. For dollar-sterling, however, there is some evidence non-stationary drift away from fundamentals last year or so before Britain's return Gold Standard, perhaps due speculation. also appear reconcile apparently conflicting in literature.