Purchasing power parity and the role of traded goods: evidence from EU states

2004 ◽  
Vol 36 (12) ◽  
pp. 1371-1375 ◽  
Author(s):  
Michael A. Jenkins
Keyword(s):  
Purchasing Power Parity ◽  
Purchasing Power ◽  
Power Parity ◽  
Traded Goods

scholarly journals The Big Mac Index And Real-Income Disparity

2014 ◽  
Vol 12 (3) ◽  
pp. 231 ◽  
Author(s):  
Vidya Atal
Keyword(s):  
Czech Republic ◽  
Purchasing Power Parity ◽  
Real Income ◽  
Purchasing Power ◽  
Income Disparity ◽  
Power Parity ◽  
Per Capita ◽  
The Government ◽  
Role Of The Government

The Big Mac Index was introduced to (semi-humorously) test the theory of purchasing power parity and measure the disparity in currency values. Instead, in this paper, we consider this index to find out the per capita real-income disparity across 54 countries. We find that the per capita real-income can be very low in some countries even when Big Mac burgers are very cheap, like in India. Among these countries, Hong Kongs per capita Big Mac affordability is the highest with 47 burgers daily whereas Pakistans people could afford just one a day. Additionally, we find that Russia and Chinas Big Mac affordability has been significantly increasing over the last decade, Brazils has remained more or less constant, however USAs Big Mac affordability has been falling, indicating that per capita real-income of Americans has been decreasing over the last decade. Finally, we find that increased role of the government might be negatively correlated to per capita real-income. Czech Republic has been experiencing increased Big Mac affordability as the country has been reducing the governments role; whereas Argentina has been experiencing reduced Big Mac affordability as the country has been moving left and increasing the governments power.

scholarly journals Purchasing Power Parity and Productivity-Bias Hypothesis

2015 ◽  
Vol 8 (2) ◽  
pp. 9-38
Author(s):  
Tri Widodo
Keyword(s):  
Purchasing Power Parity ◽  
Significant Contribution ◽  
East Asian ◽  
The Philippines ◽  
Purchasing Power ◽  
Asian Countries ◽  
Power Parity ◽  
Republic Of China ◽  
Traded Goods ◽  
Univariate Time Series

AbstractThis paper examines the purchasing power parity (PPP) theorem adjusted the “productivity-bias hypothesis” or the Balassa-Samuelson effect (Balassa, 1964; Samuelson, 1964) for eight East Asian countries including Japan, New Industrializing Economies (NIE-3: Singapore; Hong Kong, China; and Korea), the ASEAN-3 (Malaysia, Indonesia and the Philippines) and the People’s Republic of China (PRC). This paper applies three methods of analysis i.e. univariate time series, multivariate regression and Johansen multivariate cointegration. The three methods give the same conclusions. First, the PPP hypothesis does not hold in the case of the eight East Asian countries. Second, non-traded goods give significant contribution on the PPP deviation. It is confirmed by the existence of Balassa-Samuelson effect.

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