Author Description

This book provides an extensive survey of the theory and empirics of international parity conditions: purchasing power parity, covered interest parity, uncovered interest parity and real interest parity, as well as the related Fisher and market efficiency hypotheses. The first part of the book deals with the theory of international parity conditions, including some aspects of the history of economic thought. In the second part, a simplified exposition of the methods of econometric testing is presented. The exposition of unit root and cointegration tests is written in such a way as to be accessible to the non-specialist reader. This part also deals with the specification of the hypotheses, with particular emphasis on the PPP hypothesis. The third part presents a comprehensive survey of the empirical evidence on the parity conditions.