Purchasing power parity hypothesis among the main trading partners of Turkey
AbstractIn this study, we employ that panel unit root tests can be arranged in groups by cross-section dependence or independence, heterogeneous or homogenous unit roots to examine the validity of the purchasing power parity (PPP) hypothesis in Turkey, among trading partners. Using monthly observations of the period from January 2003 to December 2010 in a panel date framework of currencies of the eight largest-trading partner countries of Turkey, we find that panel unit root tests are not rejected the mean-reversion of real exchange rates. Thus, the empirical results give significant support for the purchasing power parity holds in Turkey among trading partners.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 31 (2011)
Issue (Month): 2 ()
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Purchasing power parity; trading partners; real exchange rates; panel unit root tests; floating exchange rates.;
Find related papers by JEL classification:
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
- F3 - International Economics - - International Finance
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- Mohsen Bahmani-Oskooee & Ali M. Kutan & Su Zhou, 2008. "Do Real Exchange Rates Follow a Nonlinear Mean Reverting Process in Developing Countries," Southern Economic Journal, Southern Economic Association, vol. 74(4), pages 1049-1062, April.
- Ertan Oktay & Giray Gozgor, 2013. "Estimation of disaggregated import demand functions for Turkey," Economics Bulletin, AccessEcon, vol. 33(1), pages 575-585.
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