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Publication Type
Journal Article
UWI Author(s)
Author, Analytic
Ghartey, Edward E
Author Affiliation, Ana.
Economics; Faculty of Social Sciences
Article Title
A dynamic analysis of purchasing power parity in Jamaica
Medium Designator
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Connective Phrase
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Journal Title
Social and Economic Studies
Translated Title
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Reprint Status
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Date of Publication
1997
Volume ID
46
Issue ID
1
Page(s)
57-74
Language
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Connective Phrase
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Location/URL
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ISSN
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Notes
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Abstract
Seasonal cointegration of the long-run purchasing power parity (PPP) is tested for Jamaica. Found that none of the variables have unit roots in their residual at frequencies (-) = 1/4, 1/2 and 3/4 of a cycle (2 tt); albeit, all of the series, are non-stationary at frequency 0. The normal exchange rate and relative prices, and the Jamaican consumer price index (CPI) and its dollar value of the U.S. CPI are cointegrated. Predicts that a complete float of the exchange rate will result in over 40 percent devaluation a year, and about 11 percent devaluation every quarter. The country's terms of trade will deteriorate by 60 per cent a year, with no improvement in a quarter.....
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Keywords
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