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The Purchasing Power Parity and the Russian Ruble



Since break up of the Soviet Union and formation of the Commonwealth of Independent States, new set of data on the exchange rate and the price level are generated by market forces for Russia. The market based new data set coupled with new advances in econometric literature motivated us to test the Purchasing Power Parity theory between Russian ruble and the United States dollar using cointegration analysis. The empirical results supported the PPP.

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