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Giray Gozgor
''Purchasing power parity hypothesis among the main trading partners of Turkey''
( 2011, Vol. 31 No.2 )
In this study, we employ that panel unit root tests can be arranged in groups by cross-section dependence or independence, heterogeneous or homogenous unit roots to examine the validity of the purchasing power parity (PPP) hypothesis in Turkey, among trading partners. Using monthly observations of the period from January 2003 to December 2010 in a panel date framework of currencies of the eight largest-trading partner countries of Turkey, we find that panel unit root tests are not rejected the mean-reversion of real exchange rates. Thus, the empirical results give significant support for the purchasing power parity holds in Turkey among trading partners.
Keywords: Purchasing power parity, trading partners, real exchange rates, panel unit root tests, floating exchange rates.
JEL: C2 - Single Equation Models; Single Variables: General
F3 - International Finance: General
Manuscript Received : Feb 01 2011 Manuscript Accepted : May 15 2011

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