Purchasing power parity in the Colombian exchange rate
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| Format: | Artículo científico |
| Language: | en |
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Universidad Autónoma de Manizales
2018
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| _version_ | 1876429177368870912 |
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| author | Oscar Hernán Cerquera Losada |
| author_facet | Oscar Hernán Cerquera Losada |
| contents | Purchasing power parity in the Colombian exchange rate Oscar Hernán Cerquera Losada Camilo Fabiam Gómez Segura Cristian José Arias Barrera Multidisciplinarias (Ciencias, Ciencias Sociales, Artes y Humanidades) Unitary root Cointegration Real exchange rate Purchasing power parity Objective: to determine the fulfillment of the purchasing power parity (PPP) theory in Colombia, the exchange rate with the US dollar using as a standard. Methodology: to check if the PPP in Colombia is achieved, monthly and quarterly data was used, which ran from January 1959 to December 2015. To do this, the long-term behavior from the real exchange rate was modeled, contrasting the unit roots presence and structural changes. In addition, a bivariate cointegration model was used. Results: it was found that, in the case of Colombia, the PPP theory was not fulfilled, since the peso and the dollar are not cointegrated. Therefore, according to the unitary root methodology, the PPP hypothesis in Colombia for the period 1959-2015 is not validated. Everything seems to indicate that the Colombian peso has little relation with the US dollar. Conclusions: the use of general price indices, which include tradable goods between countries, multiple barriers to international trade, imperfect competition and social, economic, political and cultural differences between both countries are important aspects when explaining the unfulfillment of the PPP. 2018 artículo científico 0121-6538 https://www.redalyc.org/articulo.oa?id=357857619015 https://www.redalyc.org/journal/3578/357857619015/ https://www.redalyc.org/journal/3578/357857619015/html/ https://www.redalyc.org/journal/3578/357857619015/357857619015.epub https://www.redalyc.org/journal/3578/357857619015/movil https://doi.org/0.30854/anf.v25.n45.2018.515 en http://www.redalyc.org/revista.oa?id=3578 Ánfora application/pdf Universidad Autónoma de Manizales Ánfora (Colombia) Num.45 Vol.25 |
| format | Artículo científico |
| id | redalyc_357857619015 |
| institution | Redalyc |
| language | en |
| publishDate | 2018 |
| publisher | Universidad Autónoma de Manizales |
| spellingShingle | Purchasing power parity in the Colombian exchange rate Oscar Hernán Cerquera Losada Multidisciplinarias (Ciencias, Ciencias Sociales, Artes y Humanidades) Unitary root Cointegration Real exchange rate Purchasing power parity Purchasing power parity in the Colombian exchange rate Oscar Hernán Cerquera Losada Camilo Fabiam Gómez Segura Cristian José Arias Barrera Multidisciplinarias (Ciencias, Ciencias Sociales, Artes y Humanidades) Unitary root Cointegration Real exchange rate Purchasing power parity Objective: to determine the fulfillment of the purchasing power parity (PPP) theory in Colombia, the exchange rate with the US dollar using as a standard. Methodology: to check if the PPP in Colombia is achieved, monthly and quarterly data was used, which ran from January 1959 to December 2015. To do this, the long-term behavior from the real exchange rate was modeled, contrasting the unit roots presence and structural changes. In addition, a bivariate cointegration model was used. Results: it was found that, in the case of Colombia, the PPP theory was not fulfilled, since the peso and the dollar are not cointegrated. Therefore, according to the unitary root methodology, the PPP hypothesis in Colombia for the period 1959-2015 is not validated. Everything seems to indicate that the Colombian peso has little relation with the US dollar. Conclusions: the use of general price indices, which include tradable goods between countries, multiple barriers to international trade, imperfect competition and social, economic, political and cultural differences between both countries are important aspects when explaining the unfulfillment of the PPP. 2018 artículo científico 0121-6538 https://www.redalyc.org/articulo.oa?id=357857619015 https://www.redalyc.org/journal/3578/357857619015/ https://www.redalyc.org/journal/3578/357857619015/html/ https://www.redalyc.org/journal/3578/357857619015/357857619015.epub https://www.redalyc.org/journal/3578/357857619015/movil https://doi.org/0.30854/anf.v25.n45.2018.515 en http://www.redalyc.org/revista.oa?id=3578 Ánfora application/pdf Universidad Autónoma de Manizales Ánfora (Colombia) Num.45 Vol.25 |
| title | Purchasing power parity in the Colombian exchange rate |
| topic | Multidisciplinarias (Ciencias, Ciencias Sociales, Artes y Humanidades) Unitary root Cointegration Real exchange rate Purchasing power parity |
| url | https://www.redalyc.org/articulo.oa?id=357857619015 https://www.redalyc.org/journal/3578/357857619015/ https://www.redalyc.org/journal/3578/357857619015/html/ https://www.redalyc.org/journal/3578/357857619015/357857619015.epub https://www.redalyc.org/journal/3578/357857619015/movil https://doi.org/0.30854/anf.v25.n45.2018.515 |