scholarly journals Purchasing Power Parity: Granger Causality Tests for the Yen-Dollar Exchange Rate

2001 ◽  
Author(s):  
Gunther Schnabl ◽  
Dirk G. Baur
Keyword(s):  
Exchange Rate ◽  
Granger Causality ◽  
Purchasing Power Parity ◽  
Purchasing Power ◽  
Power Parity ◽  
Dollar Exchange Rate ◽  
Causality Tests ◽  
Granger Causality Tests

The Rial-Dollar Exchange Rate and Purchasing Power Parity Theory

2016 ◽  
Vol 1 (1) ◽  
Author(s):  
Mohsen Bahmani-Oskooee ◽  
Sahar Bahmani
Keyword(s):  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Purchasing Power ◽  
Islamic Revolution ◽  
Power Parity ◽  
Dollar Exchange Rate ◽  
Domestic Inflation

Since the 1979 Islamic Revolution in Iran, Iranian currency has depreciated from 70 rials per dollar to as low as some 36000 rials per dollar. Has this movement followed the path predicted by the well-known Purchasing Power Parity (PPP) theory? In this paper, we show that the answer is in the affirmative and the dominating factor causing the decline is domestic inflation. Following the theory, we predict a rate of almost 47000 rials to the dollar.

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