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| Richard Paul Gregory and Gary Shelley |
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| ''Purchasing Power Parity and the Chinese Yuan'' |
| ( 2011, Vol. 31 No.2 ) |
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| Results from unit root tests applied to the bilateral China - US real exchange rate do not support purchasing power parity between the two countries. However, tests of the real equivalent exchange rate for the Chinese yuan versus a traded-weighted basket of currencies support purchasing power parity. Due to severe non-normality, critical values for tests of the real equivalent exchange rate are obtained from the wild bootstrap. |
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| Keywords: China, purchasing power parity, unit root test, wild bootstrap |
JEL: F3 - International Finance: General
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| Manuscript Received : Jan 21 2011 | | Manuscript Accepted : Apr 22 2011 |
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