We test long-run Purchasing Power Parity (PPP) within a general model of cointegration of linear and nonlinear form. Nonlinear cointegration is tested with rank tests of Breitung (2001). We determine first the order of integration of each variable, using monthly data from the post-Bretton Woods...

The sectoral fluctuations that occurred during Mexico's 1993 recession are studied. The 1993 recession differed from other recessions in that it was preceded by a period of low inflation and positive government surplus. Our empirical analysis suggests that slowdowns in natural resource intensive...