Purchasing Power Parity (PPP) in a Transition Economy - Cambodia: Empirical Evidence from Bilateral Exchange Rates
This study contributes to the existing literature by examining the validity of PPP hypothesis for Cambodia. The standard unit root tests (ADF and PP) and the panel unit root tests fail to support PPP hypothesis for the nine Cambodia’s trading partners. The unit root tests with structural break support the PPP hypothesis for the bilateral real exchange rates of Euro, Indonesia rupiah, Malaysia ringgit, and Singapore dollar. This finding is found to be relevant for ‘de-dollarization’ strategy in Cambodia, and in responding to recent global financial crisis (2007-2008).
|Date of creation:||Aug 2009|
|Contact details of provider:|| Postal: Department of Economics, Monash University, Victoria 3800, Australia|
Web page: http://www.buseco.monash.edu.au/eco/
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|Order Information:|| Web: http://www.buseco.monash.edu.au/eco/research/papers/ Email: |
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ozgur Aslan & Levent Korap, 2009.
"Are real exchange rates mean reverting? Evidence from a panel of OECD countries,"
Applied Economics Letters,
Taylor & Francis Journals, vol. 16(1), pages 23-27.
- Levent, Korap, 2009. "Are real exchange rates mean reverting? Evidence from a panel of OECD countries," MPRA Paper 19527, University Library of Munich, Germany.
- Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
- Tom Doan, "undated". "LEVINLIN: RATS procedure to perform Levin-Lin-Chu test for unit roots in panel data," Statistical Software Components RTS00242, Boston College Department of Economics.
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