Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

PURCHASING POWER PARITY HYPOTHESIS: NEW EMPIRICAL EVIDENCE F

No description
by

serife ozdamarlar

on 22 September 2014

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of PURCHASING POWER PARITY HYPOTHESIS: NEW EMPIRICAL EVIDENCE F

Content
Conclusion
Empirical Literature
The PPP is a theory about exchange rate determination. The most important determinant of exchange rates are the fact that in open economies the prices of traded goods should be the same everywhere after adjustment for custom duties and the cost of transportation.
Purchasing Power Parity
Gustav Cassel (1918)
The law of one price suggests that identical goods sell at the same price in two separate countries.
Law of One Price
The absolute purchasing power parity theory is an aggregated version of the law of one price.
Absolute Purchasing Power Parity
Purchasing Power Parity
Results
Çankaya University

Graduate School Of Social Sciences
Financial Economics
Master Thesis


Purchasing Power Parity Hypothesis:
New Empirical Evidence From Nonlinear Panel Unit Root Tests

Prepared by
Döne Özdamarlar


Supervisor
Assist.Prof. Dr. Ayşegül Eruygur

September 22, 2014

Empirical Literature
Conclusion
Relative Purchasing Power Parity
The relative version of the purchasing power parity holds true if the ratio of two broadly defined price indice stays constant when corrected for changes in the exchange rate.

Linear Univariate Unit Root Tests
Linear Panel Unit Root Tests
Nonlinear Univariate Unit Root Tests
Nonlinear Panel Unit Root Tests
Augmented Dickey Fuller (ADF)Test
Phillips - Perron (PP) Test
Dickey Fuller Generalized Least Square (DF- GLS )Test
Kwiatkowski-Phillips-Schmidt-Shin (KPSS)

Kapetanios-Snell-Shin (KSS) Test
Leybourne, Newbold, Vougas (LNV) Test
Levin Lin Chu (LLC) Test
Im Pearson and Shin (IPS) Test
The Fisher –ADF Test
The Hadri Test
Uçar and Omay Test
Results
Linear Univariate Unit Root Test Results
Rejection Test Result for Univariate Unit Root Test
Nonlinear KSS Unit Root Test Results
Linear Panel Unit Root Tests Results
Nonlinear Panel Unit Root Test Results
Rejection Test Result for Nonlinear Panel UO Unit Root Test
Rejection Test Result for KSS Unit Root Test
Mexico
United Kingdom
Poland
Hungary
Greece
Turkey
Mexico
Iceland
United
Kingdom
Poland
Greece
Turkey
Mexico
United
Kingdom
Thank You
Linear Univariate Unit Root Tests Results
Nonlinear Univaraite Unit Root Test Results
Nonlinear UO Panel Unit Root Tests Results
Overall Results
Nonlinear LNV Unit Root Test Results
Rejection Test Result for LNV Unit Root Test
General Tests Results
Full transcript