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Richard Paul Gregory and Gary Shelley
''Purchasing Power Parity and the Chinese Yuan''
( 2011, Vol. 31 No.2 )
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.
Keywords: China, purchasing power parity, unit root test, wild bootstrap
JEL: F3 - International Finance: General
Manuscript Received : Jan 21 2011 Manuscript Accepted : Apr 22 2011

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