The purchasing power parity in Australia: evidence from unit root test with structural break

Olivier Darné and Jean-François Hoarau

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Abstract: The unit root test with structural break developed by Perron and Rodriguez are used to study the purchasing power parity (PPP) in the spirit of Balassa–Samuelson in Australia for the period January 1977 to April 2004. The results indicate that there is a break in February 1985 which coincides with the exchange rate crisis in 1985, occurring after the establishment of the dirty flexible exchange rate system. We also show that there is no tendency to the PPP in Australia to hold in the long-run during this period.

Keywords: Revue; AERES (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (10)

Published in Applied Economics Letters, 2008, 15 (3), pp.203--206. ⟨10.1080/13504850600721957⟩

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Journal Article: The purchasing power parity in Australia: evidence from unit root test with structural break (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01243482

DOI: 10.1080/13504850600721957

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