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购买力平价(PPP)指的是在没有交易成本和贸易壁垒的情况下，两国之间的名义汇率应该平衡各自国家的总体价格水平。1918年，古斯塔夫卡塞尔以稳定一战之后大多数国家的汇率方式正式引入了购买力平价，自那以后，购买力平价理论开始被研究者们广泛地探讨和研究，以确定其作为一个决定汇率的实践性理论的相关性。从19世纪70年代对购买力平价的最基本关系的测试开始，到最近使用的更先进的计量经济学，如协整技术或分数次积分，从各种文献中得出的结果尚未取得一致。但即使是这样，学术界及相关人士都对购买力平价理论抱有信心，他们相信PPP拥有作为确定汇率的基石的潜力。因此本文试图参考关于购买力平价的丰富文献资料，分别调查世界上最发达的两个经济体——美国和英国长期购买力平价的总体情况。

Analysis Of The Dollar And Pound Exchange Rate

Purchasing power parity (PPP) states that in the absence of transaction costs and barriers to trade, the nominal exchange rate between two countries should equate the aggregate price levels of the respective countries. Since its formal introduction in 1918 by Gustav Cassel as a means of stabilising the exchange rates of the major countries after WW1, PPP theory has been extensively scrutinised and investigated by researchers to determine its relevance as a practical theory in exchange rate determination. Starting with the testing of the most basic relationship of PPP in the 1970s till the recent use of more advanced econometric techniques like Co-integration or Fractional Integration, the results gathered from the numerous literature have not been consistent. But even with the mixed results, there was always belief by academia or interested parties that the PPP holds the potential to be the cornerstone for the determination of exchange rates. As a result this paper attempts to join the plentiful literature on PPP, by investigating the convergence of long run PPP for two of most advanced economies in the world, United States of America and United Kingdom respectively. Co-integration and Johansen test have been correspondingly employed to the data set that spans from 1968 to 2010. The findings from both tests were contrasting where Co-integration advocating that PPP does not hold in the long run while Johansen Co-integration test shows the existence of one co-integrating relationship. Nevertheless, this result is consistent with existing literature where different econometric models have produced different results, even on similar dataset.

1. Introduction

Purchasing Power Parity (PPP) points out that in the absence of transaction costs and barriers to trade, the nominal exchange rate between two countries should be equal to the aggregate price levels of the respective countries. Although the term Purchasing Power Parity (PPP) was apparently first proposed by Gustav Cassel in 1918 as a means of stabilising the overly-inflated exchange rates of major industrialised countries after World War 1, the origination of the underlying idea has a history dating back to the Spanish scholars of 15th & 16th centuries. To the scholars, PPP serve as reliable measure to comprehend the interaction between the trade between the Spanish and other economies and the monetary impact on the exchange rate. But to current users of this theory, PPP offers an easily understood economic theory for the determination of exchange rate and the relation of the countries’ price level to exchange rate.

Since its introduction, PPP theory has been extensively scrutinised and investigated but results have not been consistent. Even with the contrasting literature, there was always belief that the PPP theory holds the potential to the theoretical solution to exchange rate determination. Dornbusch and Krugman (1976) mentioned that “Under 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。