Evidencia Empírica sobre la Paridad del Poder Adquisitivo en México

Abstract

This article describes the application of methods recently developed for testing stationarity in the Mexico/US real exchange rate, while allowing for an unknown number of structural breaks in the long-run level of the series. In our empirical implementation, inference relies on bootstraped critical values. As a result, we present unambiguous empirical evidence on the stationarity of the real exchange rate, thus favoring long-run purchasing power parity.