The Validity of Purchasing Power Parity Hypothesis for Eleven Middle Eastern Countries
Paresh Narayan () and
Prasad Biman Chand
Additional contact information
Prasad Biman Chand: The University of the South Pacific
Review of Middle East Economics and Finance, 2005, vol. 3, issue 2, 44-58
There is a large literature that examines purchasing power parity (PPP). The growth in this literature is mainly due to the absence of a consensus view on whether or not PPP holds. This paper considers PPP for 11 Middle Eastern countries using a number of tests: the one-break test unit root, the two-breaks unit root test, and the panel Lagrange multiplier (LM) unit root test with structural breaks. The main finding from univariate tests is that there is evidence for PPP in only seven countries (Lebanon, Saudi Arabia, Egypt, Iran, Syria, Tunisia and Sudan). However, when the panel LM test is applied with two structural breaks, strong evidence is found in favor of PPP for the Middle Eastern countries.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12) Track citations by RSS feed
Downloads: (external link)
For access to full text, subscription to the journal or payment for the individual article is required.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bpj:rmeecf:v:3:y:2005:i:2:n:3
Ordering information: This journal article can be ordered from
Access Statistics for this article
Review of Middle East Economics and Finance is currently edited by Ghassan Dibeh
More articles in Review of Middle East Economics and Finance from De Gruyter
Bibliographic data for series maintained by Peter Golla ().