Journal of African Studies and Development
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Article Number - E479C8910791


Vol.5(4), pp. 57 - 63 , August 2013
DOI: 10.5897/JASD2012.0218
ISSN: 2141-2189



Full Length Research Paper

Testing the PPP hypothesis in the Sub-saharan countries


Guglielmo Maria Caporale1* and Luis A. Gil-Alana2




 

1Brunel University, London, UK.

2University of Navarra, Pamplona, Spain


Email: Guglielmo-Maria.Caporale@brunel.ac.uk






 Accepted: 01 July 2013  Published: 31 August 2013

Copyright © 2013 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0


 

This paper examines the Purchasing Power Parity (PPP) hypothesis in a number of Sub-Saharan countries by testing the order of integration in the log of their real exchange rates vis-à-vis the US dollar. I(d) estimation techniques based on both asymptotic and finite sample results are used. The test results led to the rejection of PPP in all cases: orders of integration below 1 are found in fourteen countries, but the unit root null cannot be rejected.

 

Key words: Purchasing Power Parity (PPP), fractional integration.

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APA (2013). Testing the PPP hypothesis in the Sub-saharan countries. Journal of African Studies and Development, 5(4), 57 - 63.
Chicago Guglielmo Maria Caporale and Luis A. Gil-Alana. "Testing the PPP hypothesis in the Sub-saharan countries." Journal of African Studies and Development 5, no. 4 (2013): 57 - 63.
MLA Guglielmo Maria Caporale and Luis A. Gil-Alana. "Testing the PPP hypothesis in the Sub-saharan countries." Journal of African Studies and Development 5.4 (2013): 57 - 63.
   
DOI 10.5897/JASD2012.0218
URL http://www.academicjournals.org/journal/JASD/article-abstract/E479C8910791

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