Chapter 3
1. An interesting study of violations of the law of one price for some internationally distributed retail goods (of the IKEA Company) is in Haskel and Wolf (2001).
2. For interesting views on the trade deficit, see Ohmae (1991) and Pakko (1999).
3. See Cumby (1996). Also see Click (1996).
4. See Parsley and Wei (2007).
5. Equation 3.6 is valid assuming that “other currencies” is defined to include the currency being valued, but also assuming that there are many, equally-weighted currencies. Otherwise additional adjustments are necessary. For further information, see O’Brien and Ruiz de Vargas (2016b).
Chapter 4
1. In algebraic terms, after one year has elapsed, the new spot FX rate, given that APPP also holds after the goods ...
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