Does Purchasing Power Parity Hypothesis Hold for Latin American Countries?

Öz

This paper investigates the validity of Purchasing Power Parity utilizing Fourier unit root tests for the period of 2000m1-2015m2 for Brazil, Chile, Colombia and Mexico. The findings show that the Purchasing Power Parity is valid in Brazil and Colombia in case of considering structural breaks. Additionally, Purchasing Power Parity holds for all countries in case of structural breaks and nonlinearity.

Anahtar Kelimeler

• Purchasing power parity hypothesis,Structural breaks,Fourier series

Kaynakça

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