NSU Research Contributions
Title : Smuggling as Another Cause of Failure of the PPP
Authors : Mohsen Bahmani-Oskooee, Gour Goswami
Abstract : In theoretical literature, smuggling is considered as a factor contributing to the deviation of the PPP-based exchange rates from the equilibrium exchange rates with little empirical support. In this paper, we used panel data for 33 developing countries over the period 1982-1995 and used panel unit root and panel cointegration technique along with pooled OLS, fixed effects, random effects, and Parks estimator in an augmented Balassa-Samuelson framework. Using two different proxies for smuggling it is found that smuggling into a country leads to an appreciation of domestic currency that can be considered as another cause of loosing competitiveness by many developing countries.
| Journal : Journal of Economic Development | Volume : 28 | Year : 2003 | Issue : 2 |
| Pages : 23-38 | City : | Edition : | Editors : |
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