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Contrarian MacParity

Authors
Journal
Economics Letters
0165-1765
Publisher
Elsevier
Publication Date
Volume
53
Issue
2
Identifiers
DOI: 10.1016/s0165-1765(96)00911-1
Keywords
  • Big Mac Index
  • Purchasing Power Parity
  • Non-Traded Inputs
  • Balassa-Samuelson Effect

Abstract

Abstract Conventional wisdom asserts that PPP does not hold for Big Mac prices. To the contrary, this paper demonstrates that PPP holds in the time-series dimension and that country effects are linked to income, as suggested by the Balassa-Samuelson effect.

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