New evidence on purchasing power parity from 17 OECD countries

Narayan, Paresh Kumar 2005, New evidence on purchasing power parity from 17 OECD countries, Applied economics, vol. 37, no. 9, pp. 1063-1071.

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Title New evidence on purchasing power parity from 17 OECD countries
Author(s) Narayan, Paresh Kumar
Journal name Applied economics
Volume number 37
Issue number 9
Start page 1063
End page 1071
Total pages 9
Publisher Routledge
Place of publication London, England
Publication date 2005-05
ISSN 0003-6846
1466-4283
Summary There is a large literature that investigates whether or not real exchange rates are stationary in an attempt to unravel support for purchasing power parity (PPP). At best, the empirical results are mixed. This paper applies a unit root test that allows for a simultaneous structural break in the intercept and slope, shown by Sen (2003) to minimize power distortions, to examine PPP for 17 OECD countries. Our results on PPP are mixed. When the real exchange rate is based on the US dollar, evidence is found of PPP for only France, Portugal and Denmark. When the real exchange rate is based on the Deutschmark, we find evidence of PPP for Austria, Belgium, Norway, Spain, Netherlands, Switzerland, and Denmark.
Language eng
Field of Research 140212 Macroeconomics (incl Monetary and Fiscal Theory)
HERDC Research category C1.1 Refereed article in a scholarly journal
Copyright notice ©2005, Taylor and Francis
Persistent URL http://hdl.handle.net/10536/DRO/DU:30024667

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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