2024-11-0919991042-443110.1016/S1042-4431(99)00018-92-s2.0-0033228132http://dx.doi.org/10.1016/S1042-4431(99)00018-9https://hdl.handle.net/20.500.14288/8329This paper considers two potential rationales for the apparent absence of mean reversion in real exchange rates in the post-Bretton Woods era. We allow for (i) fractional integration and (ii) a double mean shift in the real exchange rate process. These methods, applied to CPI-based rates for 17 countries and WPI-based rates for 12 countries, demonstrate that the unit-root hypothesis is robust against both fractional alternatives and structural breaks. This evidence suggests rejection of the doctrine of absolute long-run purchasing power parity during the post-Bretton Woods era.EconomicsJournal Articlehttps://www.scopus.com/inward/record.uri?eid=2-s2.0-0033228132anddoi=10.1016%2fS1042-4431%2899%2900018-9andpartnerID=40andmd5=03b5b4f29704b26e3a121089cf04abbbN/A11748