Long-run validity of purchasing power parity and rank tests for cointegration for Central Asian countries
This study finds that Purchasing Power Parity (PPP) holds in the long-run for Azerbaijan, Kazakhstan and Kyrgyzstan, based on Breitung’s (2001) rank tests for cointegration. Results from further analysis indicates that nominal exchange rates and relative prices are nonlinearly interrelated. Trad...
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| Main Authors: | , , |
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| Format: | E-Article |
| Language: | English |
| Published: |
Routledge
2010
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/17991/7/Long-run%20validity%20of%20purchasing%20power%20parity%20%28abstract%29.pdf http://ir.unimas.my/id/eprint/17991/ http://www.tandfonline.com/doi/full/10.1080/00036840902762704 |
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| Summary: | This study finds that Purchasing Power Parity (PPP) holds in the long-run
for Azerbaijan, Kazakhstan and Kyrgyzstan, based on Breitung’s (2001)
rank tests for cointegration. Results from further analysis indicates that
nominal exchange rates and relative prices are nonlinearly interrelated.
Trade barriers, transportation costs and government intervention in the
pricing system in these countries may have resulted in the establishment of
the above-mentioned nonlinear relationship. |
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