In this paper simple stationarity and cointegration tests are used to check the empirical relevance of
exchange rate bubbles for a class of models that either assume purchasing power parity (PPP) or arrive at
a PPP-type relationship. While the possibility of bubbles in the dollar/deutschemark and the dollar/
pound exchange rates over the post-1973 free floating period cannot be excluded, the presence of such
indeterminacies is not substantiated. Useful extensions of the tests for future research are also suggested.
(EN)
Social Sciences ▶ Economics and Business Finance
(EN)
University of Peiraeus
