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Original Articles

Purchasing power parity and nonlinear adjustment

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Pages 35-38 | Published online: 16 Jan 2009
 

Abstract

In this article we study the out-of-sample real exchange rate forecasts of an Artificial Neural Network model, an AR model and a random walk model. The results confirm the relevance of nonlinear adjustment in the dynamics of the real exchange rate.

Acknowledgement

Financial support from Ministerio de Educación y Ciencia (Project SEJ-2005 09094/ECON) is gratefully acknowledged.

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