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Int. J. Financial Stud. 2015, 3(2), 153-161; doi:10.3390/ijfs3020153

Purchasing Power Parity in Transition Countries: Panel Stationary Test with Smooth and Sharp Breaks

1
The Center for Research on International Economics and Department of Economics, University of Wisconsin-Milwaukee, Milwaukee, WI 53201, USA
2
Department of Finance, Feng Chia University, Taichung 40724, Taiwan
3
Department of Business Administration, Nan-fang College of Sun Yat-Sen University, Guangzhou 510970, China
*
Author to whom correspondence should be addressed.
Academic Editor: Nicholas Apergis
Received: 30 January 2015 / Revised: 27 April 2015 / Accepted: 8 May 2015 / Published: 19 May 2015
View Full-Text   |   Download PDF [240 KB, uploaded 19 May 2015]   |  

Abstract

This study examines whether the long-run purchasing power parity (PPP) holds in transition economies (Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania and Russia) using monthly data over the 1995–2011 period. We apply a recently introduced panel stationary test, which accounts for sharp breaks and smooth shifts. The results indicate that the PPP holds only in two countries (i.e., Lithuania and Poland). View Full-Text
Keywords: purchasing power parity; transition countries; panel stationary test; sharp breaks and smooth breaks; Fourier function purchasing power parity; transition countries; panel stationary test; sharp breaks and smooth breaks; Fourier function
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Bahmani-Oskooee, M.; Chang, T.; Wu, T.-P. Purchasing Power Parity in Transition Countries: Panel Stationary Test with Smooth and Sharp Breaks. Int. J. Financial Stud. 2015, 3, 153-161.

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Int. J. Financial Stud. EISSN 2227-7072 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
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