TESTING FOR PPP USING SADC REAL EXCHANGE RATES

Thabo M. Mokoena, Rangan Gupta and Renee van Eyden ()

South African Journal of Economics, 2009, vol. 77, issue 3, 351-362

Abstract: This paper attempts to provide evidence indicating that the purchasing power parity (PPP) puzzle is becoming less of a puzzle. It present the results of Augmented Dickey–Fuller test, non‐linear tests of non‐stationarity and Bayesian unit root tests, applied to 10 Southern African Development Community countries. The Bayesian tests were found to be biased in favour of a trend stationary model in all cases. It is argued that non‐linear approaches to exchange rate adjustments are likely to provide a firmer basis for inference and stronger support for the PPP in the long‐term. This is more so at 1 and 5% levels of significance.

Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://doi.org/10.1111/j.1813-6982.2009.01220.x

Related works:
Working Paper: Testing for PPP Using SADC Real Exchange Rates (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:sajeco:v:77:y:2009:i:3:p:351-362

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0038-2280

Access Statistics for this article

South African Journal of Economics is currently edited by Philip A. Black

More articles in South African Journal of Economics from Economic Society of South Africa Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().