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Purchasing Power Parity Testing Unit Root Tests With Structural Break In Turkey

Author

Listed:
  • SELMA Büyükkantarcı Tolgay

    (Erciyes University, Turkey)

  • FERİT Kula

    (Erciyes University, Turkey)

Abstract

In this study, PPP, which has been the most important of many studies over the years as the exchange rate determination method in the literature, between 2003 January and 2017 August was tested for its validity in Turkey. The PPP was analyzed by ADF - PP and Lee-Strazicich fracture unit root tests in the study. Results of the study, the real exchange rate was not stable in the classical unit root tests. Three break-up dates were determined by Lee-Strazicich fracture root tests and it was determined that PPP was valid in case of structural breaks.

Suggested Citation

  • SELMA Büyükkantarcı Tolgay & FERİT Kula, 2019. "Purchasing Power Parity Testing Unit Root Tests With Structural Break In Turkey," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 71(1), pages 89-98, March.
    • Handle: RePEc:blg:reveco:v:71:y:2019:i:1:p:89-98
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    File URL: http://economice.ulbsibiu.ro/revista.economica/archive/71109selma&ferit.pdf
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    References listed on IDEAS

    as
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    5. Hakkio, Craig S., 1984. "A re-examination of purchasing power parity : A multi-country and multi-period study," Journal of International Economics, Elsevier, vol. 17(3-4), pages 265-277, November.
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