Re-examining purchasing power parity for selected emerging markets and African countries

摘要

The validity of Purchasing Power Parity (PPP) is re-examined using data for some emerging market economies and African countries, extending recent works of Doğanlar et al. (20095. Doğanlar, M., Bal, H. and Özmen, M. 2009. Testing long-run validity of purchasing power parity for selected emerging market economies. Applied Economics Letters , 16: 1443-8. [Taylor & Francis Online], [Web of Science ®]View all references) and Chang et al. (20102. Chang, T., Tang, D., Liu, W. and Lee, C. 2010. Purchasing power parity for 15 COMESA and SADC countries: evidence based on panel SURADF tests. Applied Economics Letters , 17: 1721-7. doi:DOI: 10.1080/13504850903153775[Taylor & Francis Online]View all references), respectively. For this purpose, we apply new unit root tests that allow for nonlinearities and structural change in the data-generating process. The results of this study suggest that although linear unit root test provides evidence in favour of PPP only in a few cases, the new nonlinear unit root tests suggest that the PPP proposition holds in majority of the sample countries.View full textDownload full textKeywordspurchasing power parity, nonlinearity, structural breaks, emerging marketsJEL ClassificationC12, C32, F31Related var addthis_config = { ui_cobrand: "Taylor & Francis Online", services_compact: "citeulike,netvibes,twitter,technorati,delicious,linkedin,facebook,stumbleupon,digg,google,more", pubid: "ra-4dff56cd6bb1830b" }; Add to shortlist Link Permalink http://dx.doi.org/10.1080/13504851.2011.570698