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Testing PPP for Central American real exchange rates. Evidence from new panel data stationary tests with structural breaks

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  • Jean-François Hoarau

    (CEMOI - Centre d'Économie et de Management de l'Océan Indien - UR - Université de La Réunion)

Abstract

The new panel data stationary test with multiple structural breaks developed by Carrion-i-Silvestre, Del Barrio-Castro and Lopez-Bazo (2005) is used along with standard stationary tests to study the long-run PPP hypothesis in a set of six Central American countries for the period 1976:1-2006:4. Contrary to standard tests, this new procedure provides strong support for PPP.

Suggested Citation

  • Jean-François Hoarau, 2008. "Testing PPP for Central American real exchange rates. Evidence from new panel data stationary tests with structural breaks," Post-Print hal-01243481, HAL.
  • Handle: RePEc:hal:journl:hal-01243481
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    References listed on IDEAS

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    1. Alan M. Taylor & Mark P. Taylor, 2004. "The Purchasing Power Parity Debate," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 135-158, Fall.
    2. Maddala, G S & Wu, Shaowen, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-652, Special I.
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    Cited by:

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    3. Gao Tianming & Vasilii Erokhin & Aleksandr Arskiy & Mikail Khudzhatov, 2021. "Has the COVID-19 Pandemic Affected Maritime Connectivity? An Estimation for China and the Polar Silk Road Countries," Sustainability, MDPI, vol. 13(6), pages 1-39, March.

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    • F3 - International Economics - - International Finance

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