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An Empirical Test of Purchasing Power Parity of the Algerian Exchange Rate: Evidence from Panel Dynamic

Listed author(s):
  • Si Mohammed, Kamel
  • Chérif touil, Noreddine
  • Maliki, Samir

The goal of this study is to examine the validity of the long-run purchasing power parity (PPP) for a sample of nine principle trade partners of Algeria namely Canada, China, Japan, Switzerland, Sweden, Turkey, the United Kingdom, the United States and the euro zone countries. Using panel error correction model (PECM) upon monthly data for the period 2003 M1 – 2015M5, results suggested that the bilateral exchange rate movements is a suitable to support the purchasing power parity (PPP) hypothesis. However, suggesting that there is long run relationship between exchange rates and relative prices in foreign courtiers by using panel cointegraion of Pedroni (1999, 2004), that can be interpreted by the validity of purchasing power parity for nine principle trade partners of Algeria

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File URL: https://mpra.ub.uni-muenchen.de/75285/1/MPRA_paper_75285.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 75285.

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Date of creation: Nov 2015
Publication status: Published in An Empirical Test of Purchasing Power Parity of the Algerian Exchange Rate: Evidence from Panel Dynamic 11.3(2015): pp. 19-27
Handle: RePEc:pra:mprapa:75285
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