IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v17y2010i15p1453-1459.html
   My bibliography  Save this article

Black and official market exchange rates and purchasing power parity: evidence from Latin America

Author

Listed:
  • Mohsen Bahmani-Oskooee
  • Ali Kutan
  • Su Zhou

Abstract

A group of studies have shown that in less developed countries, Purchasing Power Parity (PPP) theory is supported more often when black market exchange rates rather than official rates are used in the testing procedure. They have all relied upon linear Augmented Dickey-Fuller (ADF) test applied either to the residuals of a cointegrating vector or to real exchange rates. In this article, we use a nonlinear ADF test and show that when nonlinearity is incorporated in the testing procedure, the nonlinear tests support PPP more often than the linear test regardless of whether we use official or black market exchange rate. Besides, for the post-Bretton Woods period, PPP is almost equally supported using either the black market exchange rates or the official rates.

Suggested Citation

  • Mohsen Bahmani-Oskooee & Ali Kutan & Su Zhou, 2010. "Black and official market exchange rates and purchasing power parity: evidence from Latin America," Applied Economics Letters, Taylor & Francis Journals, vol. 17(15), pages 1453-1459.
    • Handle: RePEc:taf:apeclt:v:17:y:2010:i:15:p:1453-1459
    DOI: 10.1080/13504850902967472
    as

    Download full text from publisher

    File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/13504850902967472&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504850902967472?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Olaniyan Fatai, Musbau, 2020. "Sustainable Level Of Parallel Currency Market Premium For Selected Macroeconomic Indicators In Nigeria," Ilorin Journal of Economic Policy, Department of Economics, University of Ilorin, vol. 7(2), pages 18-38, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:17:y:2010:i:15:p:1453-1459. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.