Purchasing power parity: some 'long run' evidence from the recent float

In this paper the absolute and relative versions of purchasing power parity (ppp) are tested using annual data (over the period 1973–1985) for 5 countries. In contrast to much of the literature on ppp, evidence in favour of the ppp hypothesis is reported, particularly when a wholesale price index is used. A novel feature of the approach is the use of a pooled cross section-time series analysis