WHAT IS NEW ABOUT THE PPP THEORY IN THE NORDIC COUNTRIES? EVIDENCE FROM PANEL UNIT ROOT TESTS WITH SHARP BREAKS AND GRADUAL SHIFTS

Basit Öğe Kaydı
dc.contributor.authorDinc, Mehmet
dc.contributor.authorGomleksiz, Mustafa
dc.contributor.authorDinc, Ozlem Gul
dc.date.accessioned2024-02-23T14:49:29Z
dc.date.available2024-02-23T14:49:29Z
dc.date.issued2022
dc.departmentNEÜen_US
dc.description.abstractThe Purchasing Power Parity (PPP) theory simply refers to a rate of exchange that eliminates price level differences between countries, equalizing the purchasing power of different currencies. The theory provides some essential tools in determining exchange rates and equilibrium conditions. This study investigates the long run validity of the PPP in five Nordic countries over the monthly data in the 1976-2019 period. We use a panel LM unit root test to detect sharp breaks as well as a novel method based on the Fourier approximation taking into account gradual shifts in the real exchange rates. Firstly, despite the past evidence, results of the panel unit root test with sharp break are mostly consistent with the PPP relationship in the group of Nordic countries. Secondly, we obtain mixed results from the Fourier panel stationarity test based on the number of frequencies, implying notable evidence for the PPP in the whole and pre-Euro periods. Taking together results of the two tests, it is possible to conclude that an empirical approach which captures the nature of structural change in price adjustments is more preferable as compared to conventional tests.en_US
dc.identifier.endpage186en_US
dc.identifier.issn1582-6163
dc.identifier.issn2537-6071
dc.identifier.issue2en_US
dc.identifier.scopus2-s2.0-85134535896en_US
dc.identifier.scopusqualityQ3en_US
dc.identifier.startpage165en_US
dc.identifier.urihttps://hdl.handle.net/20.500.12452/18222
dc.identifier.volume25en_US
dc.identifier.wosWOS:000829023000010en_US
dc.identifier.wosqualityQ4en_US
dc.indekslendigikaynakWeb of Scienceen_US
dc.indekslendigikaynakScopusen_US
dc.language.isoenen_US
dc.publisherInst Economic Forecastingen_US
dc.relation.ispartofRomanian Journal Of Economic Forecastingen_US
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanıen_US
dc.rightsinfo:eu-repo/semantics/closedAccessen_US
dc.subjectPurchasing Power Parityen_US
dc.subjectNordic Countriesen_US
dc.subjectPanel Lm Unit Root Testen_US
dc.subjectFourier Approximationen_US
dc.titleWHAT IS NEW ABOUT THE PPP THEORY IN THE NORDIC COUNTRIES? EVIDENCE FROM PANEL UNIT ROOT TESTS WITH SHARP BREAKS AND GRADUAL SHIFTSen_US
dc.typeArticleen_US

Dosyalar

Koleksiyon

WoS İndeksli Yayınlar Koleksiyonu
Scopus İndeksli Yayınlar Koleksiyonu