Economic Integrations and Purchasing Power Parity Assumption

Josip Tica and Petar Sorić

Economic Research-Ekonomska Istraživanja, 2012, vol. 25, issue 1, 4-17

Abstract: The goal of the paper is to investigate in which way economic integration and economic relations affect mean reverting properties of real exchange rates. We have employed unconstrained and constrained augmented Dickey-Fuller unit root test and Im Pesaran Shin panel unit root test in order to investigate mean reverting properties of real exchange rates in transition, ASEAN, MERCOSUR countries and China vis à vis Germany and the USA. Our analysis is interesting due to the fact that it provides evidence of the impact of (further) integration on the problems with price competitiveness in EU and EMU periphery countries. Evidence suggests that economic relations of ASEAN and MERCOSUR countries vis à vis the USA and transition countries vis à vis Germany are affecting mean reverting properties of relative exchange rates. In all three groups of countries evidence of stationarity of real exchange rates is much stronger vis à vis major economic partner.

Date: 2012
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/1331677X.2012.11517490 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:taf:reroxx:v:25:y:2012:i:1:p:4-17

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rero20

DOI: 10.1080/1331677X.2012.11517490

Access Statistics for this article

Economic Research-Ekonomska Istraživanja is currently edited by Marinko Skare

More articles in Economic Research-Ekonomska Istraživanja from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().