Purchasing power parity in African countries: Evidence from panel suradf test
This study reexamines the validity of long-run purchasing power parity (PPP) hypothesis using a battery of panel unit root tests for 11 developing countries in Africa over the period 1980-2007. Based on the conventional panel unit root tests, we found evidence that the monthly real exchange rates in...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Blackwell Publishing Ltd.
2010
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| Online Access: | http://ir.unimas.my/id/eprint/17827/ http://ir.unimas.my/id/eprint/17827/1/PURCHASING%20POWER%20PARITY%20IN%20AFRICAN%20COUNTRIES%20%28abstract%29.pdf |
| _version_ | 1848838377823010816 |
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| author | Ahmad Zubaidi, Baharumshah Evan, Lau Mudziviri t., Nziramasanga |
| author_facet | Ahmad Zubaidi, Baharumshah Evan, Lau Mudziviri t., Nziramasanga |
| author_sort | Ahmad Zubaidi, Baharumshah |
| building | UNIMAS Institutional Repository |
| collection | Online Access |
| description | This study reexamines the validity of long-run purchasing power parity (PPP) hypothesis using a battery of panel unit root tests for 11 developing countries in Africa over the period 1980-2007. Based on the conventional panel unit root tests, we found evidence that the monthly real exchange rates in these countries were mean reverting. By contrast, the series-specific unit root test proposed by Breuer "et al." (SURADF) reveals that only six of the 11 RERs series were stationary using the US dollar as reference currency. Additionally, our results reveal that there is stronger evidence of the parity condition with the Rand-based rates than in the other currency-based rates like the US dollar or Euro. We conclude that PPP holds in some, but not all, of the African countries according to the SURADF tests. |
| first_indexed | 2025-11-15T06:54:36Z |
| format | Article |
| id | unimas-17827 |
| institution | Universiti Malaysia Sarawak |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T06:54:36Z |
| publishDate | 2010 |
| publisher | Blackwell Publishing Ltd. |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | unimas-178272023-06-14T03:20:25Z http://ir.unimas.my/id/eprint/17827/ Purchasing power parity in African countries: Evidence from panel suradf test Ahmad Zubaidi, Baharumshah Evan, Lau Mudziviri t., Nziramasanga HC Economic History and Conditions This study reexamines the validity of long-run purchasing power parity (PPP) hypothesis using a battery of panel unit root tests for 11 developing countries in Africa over the period 1980-2007. Based on the conventional panel unit root tests, we found evidence that the monthly real exchange rates in these countries were mean reverting. By contrast, the series-specific unit root test proposed by Breuer "et al." (SURADF) reveals that only six of the 11 RERs series were stationary using the US dollar as reference currency. Additionally, our results reveal that there is stronger evidence of the parity condition with the Rand-based rates than in the other currency-based rates like the US dollar or Euro. We conclude that PPP holds in some, but not all, of the African countries according to the SURADF tests. Blackwell Publishing Ltd. 2010 Article PeerReviewed text en http://ir.unimas.my/id/eprint/17827/1/PURCHASING%20POWER%20PARITY%20IN%20AFRICAN%20COUNTRIES%20%28abstract%29.pdf Ahmad Zubaidi, Baharumshah and Evan, Lau and Mudziviri t., Nziramasanga (2010) Purchasing power parity in African countries: Evidence from panel suradf test. South African Journal of Economics, 78 (1). ISSN 1813-6982 https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1813-6982.2010.01231.x DOI: 10.1111/j.1813-6982.2010.01231.x · |
| spellingShingle | HC Economic History and Conditions Ahmad Zubaidi, Baharumshah Evan, Lau Mudziviri t., Nziramasanga Purchasing power parity in African countries: Evidence from panel suradf test |
| title | Purchasing power parity in African countries: Evidence from panel suradf test |
| title_full | Purchasing power parity in African countries: Evidence from panel suradf test |
| title_fullStr | Purchasing power parity in African countries: Evidence from panel suradf test |
| title_full_unstemmed | Purchasing power parity in African countries: Evidence from panel suradf test |
| title_short | Purchasing power parity in African countries: Evidence from panel suradf test |
| title_sort | purchasing power parity in african countries: evidence from panel suradf test |
| topic | HC Economic History and Conditions |
| url | http://ir.unimas.my/id/eprint/17827/ http://ir.unimas.my/id/eprint/17827/ http://ir.unimas.my/id/eprint/17827/ http://ir.unimas.my/id/eprint/17827/1/PURCHASING%20POWER%20PARITY%20IN%20AFRICAN%20COUNTRIES%20%28abstract%29.pdf |