scholarly journals The validity of the purchasing power parity in intermediate and flexible exchange rate regimes: Empirical evidence from Turkey

2014 ◽  
Vol 6 (10) ◽  
pp. 249-252
Author(s):  
Erdal Bahar ◽  
Pnar Abuzer
Keyword(s):  
Exchange Rate ◽  
Empirical Evidence ◽  
Purchasing Power Parity ◽  
Exchange Rate Regimes ◽  
Flexible Exchange Rate ◽  
Purchasing Power ◽  
Power Parity

scholarly journals Market Efficiency and Long Run Purchasing Power Parity Disequilibria of the Mexican Peso Under Changing Exchange Rate Regimes

2004 ◽  
Author(s):  
Alejandra Cabello ◽  
Edgar Iván Ortiz ◽  
Robert I. Johnson
Keyword(s):  
Exchange Rate ◽  
Market Efficiency ◽  
Purchasing Power Parity ◽  
Inflation Targeting ◽  
Structural Changes ◽  
Exchange Rate Regimes ◽  
Purchasing Power ◽  
Power Parity ◽  
Macroeconomic Policies ◽  
Long Run

This paper tests if the efficient market version of Purchasing Power Parity (EMPPP) holds for the Mexican case for the 1970-2002 period in an environment of changing exchange rate regimes. Two regression analyses which extend PPP to a dynamic intertemporal model, based on market efficiency, are used, and in addition two unit root tests are applied. In general, the obtained empirical evidence does not support the EMPPP. Results suggest an inefficient market resulting from weak exchange rate policies and weak adoptions of several exchange rate regimes without proper inflation targeting and the application of strong and disciplined macroeconomic policies and structural changes.  

scholarly journals A Correct Test of Purchasing Power Parity: The Case of Pak-Rupee Exchange Rates

1996 ◽  
Vol 35 (4II) ◽  
pp. 671-682 ◽  
Author(s):  
Razzaque H. Bhatti
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Empirical Evidence ◽  
Purchasing Power Parity ◽  
Trade Balance ◽  
Purchasing Power ◽  
Power Parity ◽  
Long Run ◽  
Bayesian Test ◽  
Almost All

This paper presents some empirical evidence on long-run purchasing power parity (PPP) for eight Pak-rupee exchange rates over the period 1982:1–1994:4. Results obtained from testing for cointegration and coefficient restrictions using the Johansen (1988, 1991) procedure are supportive of PPP in almost all cases. These results are also supported by those obtained from testing for mean reversion in the real exchange rate using the Sims (1988) Bayesian test. One of the conclusions that emerge from these results is that devaluation of Pak-rupee vis-à-vis major industrial currencies under investigation may be unlikely to improve the country’s external competitiveness and, consequently, the deficit in its trade balance.

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