IDEAS home Printed from
   My bibliography  Save this article

Purchasing power parity with nonlinear threshold unit root test


  • Tsangyao Chang
  • Chi-Wei Su
  • Yu-Shao Liu


This study applies a simple and powerful nonlinear threshold unit root test proposed by Caner and Hansen (2001) to test the validity of long-run Purchasing Power Parity (PPP) in a sample of nine East Asian countries. The empirical results indicate that PPP holds true for more than half of these nine East Asian countries under study, and the adjustment towards PPP is found to be nonlinear.

Suggested Citation

  • Tsangyao Chang & Chi-Wei Su & Yu-Shao Liu, 2012. "Purchasing power parity with nonlinear threshold unit root test," Applied Economics Letters, Taylor & Francis Journals, vol. 19(9), pages 839-842, June.
  • Handle: RePEc:taf:apeclt:v:19:y:2012:i:9:p:839-842 DOI: 10.1080/13504851.2011.607110

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

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

    References listed on IDEAS

    1. Sarmistha Pal, 2004. "Child schooling in Peru: Evidence from a sequential analysis of school progression," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(4), pages 657-680, December.
    2. Sander, William, 1992. "The effects of ethnicity and religion on educational attainment," Economics of Education Review, Elsevier, vol. 11(2), pages 119-135, June.
    3. Cleland, John G. & van Ginneken, Jerome K., 1988. "Maternal education and child survival in developing countries: The search for pathways of influence," Social Science & Medicine, Elsevier, vol. 27(12), pages 1357-1368, January.
    4. Sumon Kumar Bhaumik & Manisha Chakrabarty, 2007. "Is Education the Panacea for Economic Deprivation of Muslims? Evidence from Wage Earners in India, 1987-2004," William Davidson Institute Working Papers Series wp858, William Davidson Institute at the University of Michigan.
    5. Olivier Bargain & Sumon Kumar Bhaumik & Manisha Chakrabarty & Zhong Zhao, 2009. "Earnings Differences Between Chinese And Indian Wage Earners, 1987-2004," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(s1), pages 562-587, July.
    6. Tansel, Aysit, 1997. "Schooling Attainment, Parental Education, and Gender in Cote d'Ivoire and Ghana," Economic Development and Cultural Change, University of Chicago Press, vol. 45(4), pages 825-856, July.
    7. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
    8. Black, Sandra E & Lynch, Lisa M, 1996. "Human-Capital Investments and Productivity," American Economic Review, American Economic Association, vol. 86(2), pages 263-267, May.
    9. Tansel, Aysit, 2002. "Determinants of school attainment of boys and girls in Turkey: individual, household and community factors," Economics of Education Review, Elsevier, vol. 21(5), pages 455-470, October.
    10. Sumon Kumar Bhaumik & Manisha Chakrabarty, 2008. "Does move to market have an impact on earnings gap across gender? Some evidence from India," Applied Economics Letters, Taylor & Francis Journals, vol. 15(8), pages 601-605.
    11. Robert J. Barro, 2001. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 91(2), pages 12-17, May.
    Full references (including those not matched with items on IDEAS)


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

    Cited by:

    1. Mohsen Bahmani-Oskooee & Tsangyao Chang & Tsung-Hsien Chen & Han-Wen Tzeng, 2017. "Revisiting purchasing power parity in Eastern European countries: quantile unit root tests," Empirical Economics, Springer, vol. 52(2), pages 463-483, March.
    2. repec:rjr:romjef:v::y:2017:i:4:p:166-181 is not listed on IDEAS

    More about this item


    Access and download statistics


    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:19:y:2012:i:9:p:839-842. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.