THE VALIDITY OF THE PURCHASING POWER PARITY HYPOTHESIS IN OECD COUNTRIES: EVIDENCE FROM THE FOURIER TEST / OECD Ülkelerinde Satın Alma Gücü Paritesi Hipotezinin Geçerliliği: Fourier Testinden Kanıtlar

• Published in: Uluslararası Ekonomi, İşletme ve Politika Dergisi
• Main Author: Süreyya İmre
• Format: Article in Journal/Newspaper
• Language: English; Turkish
• Published: Recep Tayyip Erdoğan Üniversitesi 2021
• Subjects: oecd countries; purchasing power parity; real exchange rate; fourier kpss unit root tests; oecd ülkeleri; satın alma gücü paritesi; reel döviz kuru; fourier kpss birim kök testleri; Political science; J; Economics as a science; HB71-74; Canada; New Zealand; Norway; Iceland
• Online Access: https://doi.org/10.29216/ueip.988853; https://doaj.org/article/baa51764170c4adc8dfeba446734f178

According to purchasing power parity (PPP), the nominal exchange rate between the two currencies should be equal to the ratio of the total price levels between the two countries. In other words, it is a simple theory that argues that countries' currencies will have the same purchasing value. In this study, 25 OECD countries is aimed to test the validity of the purchasing power parity hypothesis. The validity of the hypothesis was tested with the monthly data of 1980-Q1 2018-Q12 and Fourier KPSS unit root tests. As a result of the analysis, the validity of the purchasing power parity hypothesis was provided in Brazil, France, Italy, Sweden, Iceland, Ireland, Spain; It has been determined that the purchasing power parity hypothesis is not valid in the countries of Australia, Austria, Belgium, Canada, Germany, Japan, Malaysia, Mexico, Switzerland, USA, Chile, Colombia, Finland, Luxembourg, Netherlands, New Zealand, Norway, Portugal.