Evidence on the purchasing power parity in a panel of cities |
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| Authors: | Josep LluÍs Carrion-I-Silvestre Tomás Del Barrio Enrique López-Bazo |
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| Affiliation: | ‘Anàlisi Quantitativa Regional’ Research Group , Departament d'Econometria, Estadística i Economia Espanyola, Universitat de Barcelona , Spain |
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| Abstract: | Evidence is provided on the PPP hypothesis using a sample of 50 Spanish cities for a long time period through the application of panel data unit root tests. Although results suggest non-rejection of the PPP, short-run deviations – as measured by half-lives – indicate that real factors might be causing a slow rate of convergence to a common price index, even in highly integrated economies. |
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