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Does Purchasing Power Parity hold in Thailand?

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  • Jiranyakul, Komain
  • Batavia, Bala

Abstract

The main objective of this study is to use disaggregate data between Thailand and its major trading partners to examine the validity of the purchasing power parity (PPP). Bilateral exchange rates between domestic currency (Thai baht) and each currency of major trading partners as well as the relative prices during the period of July 1997 to December 2007 are used to investigate the existence of stationary real exchange rates and cointegration between nominal exchange rates and relative prices. The results from various unit root tests and cointegration test show that PPP does not seem to hold in Thailand.

Suggested Citation

  • Jiranyakul, Komain & Batavia, Bala, 2009. "Does Purchasing Power Parity hold in Thailand?," MPRA Paper 47032, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:47032
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    References listed on IDEAS

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    Cited by:

    1. David De Villiers & Andrew Phiri, 2022. "Towards resolving the purchasing power parity (PPP) ‘Puzzle’ in newly industrialized countries (NIC’s)," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 31(2), pages 161-180, February.
    2. Anwar Al-Gasaymeh & John Kasem, 2016. "Long-Run Purchasing Power Parity And Exchange Rates: Evidence From The Middle East," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 10(2), pages 41-53.

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    More about this item

    Keywords

    Exchange rates; relative prices; unit root; cointegration; purchasing power parity;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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