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The Impact of Structural Break(s) on the Validity of Purchasing Power Parity in Turkey: Evidence from Zivot-Andrews and Lagrange Multiplier Unit Root Tests

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  • Hakan Kum

    (Nevsehir University, Faculty of Economics and Administrative Sciences, Nevsehir, Turkey.)

Abstract

This study examines the validity of the purchasing power parity (PPP) in Turkey for annual data from 1953 to 2009. While results from both the ADF unit root and the DF-GLS unit root test indicate mixed results, PPP holds for Turkey with the presence of structural breaks which are obtained by Zivot and Andrews and Lagrange Multiplier unit root tests.

Suggested Citation

  • Hakan Kum, 2012. "The Impact of Structural Break(s) on the Validity of Purchasing Power Parity in Turkey: Evidence from Zivot-Andrews and Lagrange Multiplier Unit Root Tests," International Journal of Economics and Financial Issues, Econjournals, vol. 2(3), pages 241-245.
    • Handle: RePEc:eco:journ1:2012-03-2
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    References listed on IDEAS

    as
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    Cited by:

    1. Durmus Cagri Yildirim & Tugba Turan, 2023. "Revisiting of Interest Rate Channel: Nonlinear transmission of Monetary Policy Shocks to the Turkish Economy," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 12(1), pages 199-223.

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    More about this item

    Keywords

    Purchasing power parity; PPP; Structural Breaks; Turkish Economy;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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