An empirical examination of the purchasing-power-parity hypothesis for Denmark 1875-2002

Working paper no 14, 2004

Authors Abildgren, Kim
Subject Danish Economy; Monetary conditions; Inflation, wages and prices; Financial markets
Type Working paper
Year 2004
Published 4 May 2004
The paper reviews the empirical evidence regarding long-run relative purchasing-powerparity (PPP) convergence in the case of Denmark using simple unit-root tests and cointegration tests on new historical time-series indices for the effective krone rate since1875. The results based on a real effective krone rate index with wholesale prices as deflators support a hypothesis of long-run relative PPP convergence.