Efficiency of the black market for foreign exchange and PPP: the case of the Dominican Republic

Efficiency of the black market for foreign exchange in a developing country can be assessed by testing whether that market complies with the 'relative' version of the purchasing power parity hypothesis. This paper applies nonstationarity and cointegration to investigate this hypothesis for the Dominican Republic. Both the Engle-Granger and Johansen techniques support cointegration, so the black market for foreign exchange in the Dominican Republic is efficient.

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Year of publication:	1999
Authors:	Sanchez-Fung, Jose
Published in:	Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 6.1999, 3, p. 173-176
Publisher:	Taylor & Francis Journals

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009202787