Working Paper presents research work by both Danmarks Nationalbank’s employees and our partners. The series is primarily targeted at professionals and people with an interest in central banking research as well as economics and finance in a broader sense.
An empirical examination of the purchasing-power-parity hypothesis for Denmark 1875-2002
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.