NSU Research Contributions
Title : Does Political Risk Lead to Purchasing Power Disparity? A Panel Disaggregated Approach
Authors : Gour Goswami, Saima Khan
| Journal Title: Bangladesh Development Studies | Volume Number: 31 | Publication Year : 2005 | Issue Number: March-June |
| Index: scopus | Ranking: No Ranking | ISSN: 0304095X | Publisher Name: BIDS |
| Pages : 25-35 | |||
| Funding Source : None |
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Direct Sustainable Development Goals : SDG9 Industry, Innovation & Infrastructure |
Indirect Sustainable Development Goals : SDG9 Industry, Innovation & Infrastructure |
Sustainable Development Sub Goals : Promote inclusive and sustainable industrialization |
| Impact statement: To date, few studies have examined the impact of political risk on purchasing power disparities. The studies conducted thus far have been limited in the political risk components used, the countries examined, and the time span. We add to the existing literature by being the first to examine how 13 political risk indices from the International Country Risk Guide (henceforth, ICRG) affect the real exchange rate. In this study, we use 86 OECD and non-OECD countries over the period 1984-1997 and employ panel estimation techniques, including one-way fixed-effects, two-way fixed-effects, one-way random-effects, and two-way random-effects. It is found that regardless of whether Countries are classified according to income or region, in most cases, political Risk does have a significant impact on the real exchange rate, in that risk leads to either real appreciation or depreciation, and is instrumental in purchasing power disparity. | Collaboration: Other | Keywords: PPP, Exchange Rates, Corruption, Political Risk |
