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Purchasing power parity hypothesis among the main trading partners of Turkey

Author

Listed:
  • Giray Gozgor

    () (Department of International Trade and Business, Dogus University, Turkey)

Abstract

In 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.

Suggested Citation

  • Giray Gozgor, 2011. "Purchasing power parity hypothesis among the main trading partners of Turkey," Economics Bulletin, AccessEcon, vol. 31(2), pages 1432-1438.
  • Handle: RePEc:ebl:ecbull:eb-11-00068
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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I2-P134.pdf
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    References listed on IDEAS

    as
    1. 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.
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    Cited by:

    1. Dilem Yıldırım, 2016. "Empirical Investigation of Purchasing Power Parity for Turkey: Evidence from Recent Nonlinear Unit Root Tests," ERC Working Papers 1604, ERC - Economic Research Center, Middle East Technical University, revised Apr 2016.
    2. Ertan Oktay & Giray Gozgor, 2013. "Estimation of disaggregated import demand functions for Turkey," Economics Bulletin, AccessEcon, vol. 33(1), pages 575-585.

    More about this item

    Keywords

    Purchasing power parity; trading partners; real exchange rates; panel unit root tests; floating exchange rates.;

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • F3 - International Economics - - International Finance

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