Purchasing Power Parity in economies in transition: evidence fr
نویسنده
چکیده
The present paper tests for the validity of long-run purchasing power parity (PPP) for seventeen European economies in transition. Analysis is performed following the methodological suggestions expressed in recent studies for PPP. Longrun PPP is initially tested for each economy vis-a-vis the US, using the Johansen cointegration methodology and then for the whole set of countries using the Larsson et al panel cointegration technique. The analysis provides support for long-run equilibria, but the coefficients of the estimated cointegrating vectors violate the symmetry and proportionality hypotheses suggested by PPP. We provide some arguments for these findings, based on the existing literature on transition and foreign exchange markets. JEL classification: C32, C52, F31.
منابع مشابه
Purchasing Power Parity Hypothesis In OIC Countries: Evidence From Panel Unit Root Tests With Heterogeneous Structural Breaks
متن کامل
Does Scale of Public Hospitals Affect Bargaining Power? Evidence From Japan
Background Many of public hospitals in Japan have had a deficit for a long time. Japanese local governments have been encouraging public hospitals to use group purchasing of drugs to benefit from the economies of scale, and increase their bargaining power for obtaining discounts in drug purchasing, thus improving their financial situation. In this study, we empirically investigate whether or no...
متن کاملThe Role of Institutions in the Dynamic Effects of Oil Revenues in Oil Economies
The purpose of this paper is to investigate the system of oil revenues effects on the production performance of oil-rich countries in both short and long-run. To reveal new insight, a macroeconomic model is designed to hypothesize long-run structural relations in the economies of the oil-rich countries including three long-run relationships of real output, real money balance, and the adjusted p...
متن کاملSome Evidence of Purchasing Power Parity
Empirical support for purchasing power parity is mixed with results dependent on the time frame and countries under examination, the methodology employed, attempts to control for aggregation bias in the data, and whether adjustments are made to account for productivity differences across nations. As a central component of macroeconomic thinking, purchasing power parity is battered and battle-wo...
متن کامل