Journals / Afyon Kocatepe Üniversitesi Sosyal Bilimler Dergisi / 2019 / Cilt: 21 - Sayı: 1
Structural Changes and Purchasing Power Parity in Turkish Exchange Rates
- Pages
- 203–208
- DOI
- —
Abstract
We re-examine the purchasing power parity (PPP) hypothesis for Turkey by concentrating on modelling structural changes as sharp (with dummy variables) and smooth (with a Fourier approximation) process. The results show (i) more evidence in favor of PPP hypothesis when structural changes are taken into account and (ii) modelling the shifts with different approaches plays a crucial role for policy implications.
Özet
We re-examine the purchasing power parity (PPP) hypothesis for Turkey by concentrating on modelling structural changes as sharp (with dummy variables) and smooth (with a Fourier approximation) process. The results show (i) more evidence in favor of PPP hypothesis when structural changes are taken into account and (ii) modelling the shifts with different approaches plays a crucial role for policy implications.