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Purchasing Power Parity in the Euro Area: Evidence from Structural Break LM Test

Author

Listed:
  • Seher Suluk

    (Candidate in Economics, Nev ehir Hac Bekta Veli University, Social Sciences Institute, Nevsehir, Turkey)

  • Kemaletttin Tanr seven

    (Phd in Economics, Nevsehir, Turkey)

Abstract

Purchasing power parity (PPP) which is an indicator of price level varieties across the countries is a popular work item at the present time. This study focuses on PPP for EU member countries which use Euro. In other words, in this study, Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Latvia, Lithuania, Poland, Romania, Sweden and the United Kingdom which do not use Euro among the 28 member countries are being ignored, the study deals with 19 EU member countries which use Euro (Euro zone). These countries are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Portugal, Slovakia, Slovenia, Spain and the Netherlands. In this study, LM unit root test which is improved by Lee ve Strazicich have been perfomed for the countries in question between 2000 and 2016 by gauss method.

Suggested Citation

  • Seher Suluk & Kemaletttin Tanr seven, 2018. "Purchasing Power Parity in the Euro Area: Evidence from Structural Break LM Test," International Journal of Economics and Financial Issues, International Journal of Economics and Financial Issues, vol. 8(2), pages 370-375.
    • Handle: RePEc:eco:journ1:2018-02-45
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    References listed on IDEAS

    as
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    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange

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