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Uluslararası Ticarette Satın Alma Gücü Paritesinin Geçerliliği Sorunu: Türkiye için Zaman Serisi Analizi
[The Validity Problem of Purchasing Power Parity in International Trade: A Time Series Analysis for Turkey]

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  • Bilgin, Cevat

Abstract

Hypothesis of purchasing power parity basically depends on the presumption of unique price in international trade. The price of a good is the same all over the world when it is converted to a common currency. In other words, one unit of national currency has the same purchasing power everywhere in the world. The other form of purchasing power parity (PPP) does not depend on the assumption of unique price, instead it is based on the argument that exchange rates changes by the amount of differences in inflations of the involved countries. In this article, the validities of these two forms of PPP for Turkey have been evaluated by imposing time series applications on the quarterly data for the period of 1986Q1-2017Q4. For the sake of 2001 economic crisis, the sample period has been divided into two subperiods; 1986Q1-2001Q3 and 2001Q4-2017Q4. The unit root and cointegration tests have been applied to both of the subperiods. The statistical evidence supporting the absolute form of PPP could not have been gained. On the other hand, for both of the subperiods, the validity of relative version of PPP has been approved by the application results.

Suggested Citation

  • Bilgin, Cevat, 2018. "Uluslararası Ticarette Satın Alma Gücü Paritesinin Geçerliliği Sorunu: Türkiye için Zaman Serisi Analizi [The Validity Problem of Purchasing Power Parity in International Trade: A Time Series Analy," MPRA Paper 87630, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:87630
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    References listed on IDEAS

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    More about this item

    Keywords

    International Trade; Purchasing Power Parity; Exchange Rate; Inflation; Unit Root; Cointegration;
    All these keywords.

    JEL classification:

    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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