Purchasing Power Parity for developing and developed countries. What can we learn from non-stationary panel data models?

Abstract: The aim of this paper is to apply recently developed panel cointegration techniques proposed by Pedroni (1999, 2004) and generalized by Banerjee and Carrion-i-Silvestre (2006) to examine the robustness of the PPP concept for a sample of 80 developed and developing countries. We find that strong PPP is verified for OECD countries and weak PPP for MENA countries. However in African, Asian, Latin American and Central and Eastern European countries, PPP does not seem relevant to characterize the long-run behavior of the real exchange rate. Further investigations indicate that the nature of the exchange rate regime doesn't condition the validity of PPP which is more easily accepted in countries with high than low inflation.

Keywords: panel unit-root and cointegration tests; Purchasing power parity; real exchange rate; developed country; developing country; panel unit-root and cointegration tests. (search for similar items in EconPapers)
Date: 2008-09-01
Note: View the original document on HAL open archive server: https://hal.science/hal-00322105
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Published in Journal of Economic Surveys, 2008, Volume 22 (Issue 4), pp.752-773

Downloads: (external link)
https://hal.science/hal-00322105/document (application/pdf)

Related works:
Journal Article: PURCHASING POWER PARITY FOR DEVELOPING AND DEVELOPED COUNTRIES. WHAT CAN WE LEARN FROM NON‐STATIONARY PANEL DATA MODELS? (2008)
Working Paper: Purchasing Power Parity for Developing and Developed Countries. What can we Learn from Non-Stationary Panel Data Models? (2008)
Working Paper: Purchasing Power Parity for Developing and Developed Countries: What can we learn from Non-Stationary Panel Data Models (2008)
Working Paper: Purchasing Power Parity for Developing and Developed Countries: What can we learn from Non-Stationary Panel Data Models (2008)
Working Paper: Purchasing Power Parity for Developing and Developed Countries: What Can We Learn from Non-Stationary Panel Data Models? (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00322105

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().