Testing the validity of quasi PPP hypothesis: evidence from a recent panel unit root test with structural breaks

Guloglu B., Ispir S., OKAT D.

APPLIED ECONOMICS LETTERS, vol.18, no.18, pp.1817-1822, 2011 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 18 Issue: 18
  • Publication Date: 2011
  • Doi Number: 10.1080/13504851.2011.564124
  • Journal Name: APPLIED ECONOMICS LETTERS
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.1817-1822
  • Istanbul Technical University Affiliated: No

Abstract

In this article we test the validity of quasi Purchasing Power Parity (PPP) hypothesis for 18 Turkish real exchange rate series using a panel unit root test that allows for structural breaks in the level and the trend. Test results based on a long span of data find evidence of the validity of quasi PPP hypothesis for almost all the exchange rate series under study and for the whole of panel as well.