Title : Political Rights, Civil Liberties, and the PPP in Developing Countries

Authors : Gour Gobinda Goswami, M. Bahmani-Oskooee

Abstract : What causes the PP-based exchange rate to deviate from the equilibrium rate that is determined by the market forces? After reviewing all the factors from the literature, we argue that the gap between the PPP and the equilibrium exchange rate is wider in countries that have less political rights. e support this hypothesis by using data from 69 developing countries over 1972-1998 period in a panel setting. The results strongly support the notion that lack of political rights and civil liberties indeed contribute to the deviation of the PPP from the equilibrium exchange rate in developing countries.

Journal : The Global Journal of Finance and Economics Volume : 1 Year : 2004 Issue : 1
Pages : 1-9 City : Edition : Editors :
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