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Journals / Finans Politik ve Ekonomik Yorumlar / 2018 / Sayı: 637

Testing the Validity of Purchasing Power Parity in Emerging Market Economies

Gelişen Piyasa Ekonomilerinde Satınalma Gücü Paritesinin Geçerliliğinin Test Edilmesi

Faruk MİKE
Pages
7–30
Publication Date
2018-03-01
DOI
—
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

This suggests that relative price movements are not an effective policy instrument in determining the future values of exchange rates.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:In this study, the long-run validity of the purchasing power parity is tested by the real exchange rate model and the purchasing power parity (unconstrained form) model for 15 emerging market economies.
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Key Findings & Data:For the exchange rate model, traditional and structural breakpoint unit root tests were applied for 2003Q1- 2015Q4 periods.
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Conclusion & Impact:This suggests that relative price movements are not an effective policy instrument in determining the future values of exchange rates.
🔬Design:Modeling & Simulation
📍Scope:2003-2015 Verileri
⚙️Variables:Reel Döviz Kuru · Satınalma Gücü Paritesi · Zaman Serisi ve Panel Veri Analizleri

Abstract

In this study, the long-run validity of the purchasing power parity is tested by the real exchange rate model and the purchasing power parity (unconstrained form) model for 15 emerging market economies. For the exchange rate model, traditional and structural breakpoint unit root tests were applied for 2003Q1- 2015Q4 periods. For the purchasing power parity model, time series and panel data analysis were applied for both 2003Q1-20015Q4 quarterly and 2003-2015 yearly periods. Findings from the current study showed us that purchasing power parity generally were not valid in the fifteen developing economies for the studied terms. This suggests that relative price movements are not an effective policy instrument in determining the future values of exchange rates.

Özet

Bu çalışmada satınalma gücü paritesinin uzun dönemli geçerliliği 15 gelişen piyasa ekonomisi için reel döviz kuru modeli ve satınalma gücü paritesi modeli (kısıtsız form) ile test edilmektedir. Reel döviz kuru modeli için 2003Q1-2015Q4 çeyreklik dönemler itibariyle geleneksel ve yapısal kırılmalı birim kök testlerine, satınalma gücü paritesi modeli için 2003Q1-2015Q4 çeyreklik ve 2003-2015 yıllık dönemler itibariyle zaman serisi ve panel veri analizlerine yer verilmektedir. Çalışmadan elde edilen bulgular genel olarak satınalma gücü paritesinin 15 gelişen piyasa ekonomisi için geçerli olmadığına yöneliktir. Bu durum nispi fiyat hareketlerinin döviz kurlarının gelecek değerlerinin belirlenmesinde etkin bir politika aracı olmadığını ortaya koymaktadır.

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Cite This Article

MİKE, F. (2018). Testing the Validity of Purchasing Power Parity in Emerging Market Economies. Finans Politik ve Ekonomik Yorumlar, Sayı: 637, 7–30. https://ajindex.com/articles/989082

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