Template-Type: ReDIF-Paper 1.0
Title: On the Stationarity of the Real Exchange Rate and the Role of Transaction Costs
Author-Name: Roland Schmidt
Author-Postal: 
Author-Phone: 
Author-Homepage: 
Classification-JEL: 
Keywords: 
Abstract: This paper investigates the real exchange rate between the German
 mark and the dollar for stationarity. The different tests we apply show
 conflicting evidence. The puzzle we resolve by introducing transaction
 costs that impose a range of real exchange rates to be compatible with
 purchasing power parity. This interpretation is finally successfully tested
 within an error correction model.
Series: Sonderforschungsbereich 303, University of Bonn, Germany
Length: 32 pages
Creation-Date: 1992-08
Revision-Date: 
Handle: RePEc:bon:bonsfb:218