Long-Run Purchasing Power Parity with Asymmetric Adjustment: Evidence from Mainland China and Taiwan
This study applies threshold cointegration test advanced by Enders and Siklos (2001) to investigate the properties of asymmetric adjustment in long-run purchasing power parity (PPP) for both Mainland China and Taiwan during the January 1986 to October 2009 period. Although there is evidence of long-run PPP for both Mainland China and Taiwan, the adjustment mechanism is asymmetric. These results have important policy implications for both Mainland China and Taiwan under study.
Volume (Year): (2011)
Issue (Month): 3 (September)
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