NSU Research Contributions
Title : Black Market Exchange Rates and Purchasing Power Parity in Emerging Economies
Authors : Mohsen Bahmani-Oskooee, Gour Goswami
| Journal Title: Emerging Markets Finance and Trade | Volume Number: 41 | Publication Year : 2005 | Issue Number: 3 |
| Index: scopus | Ranking: Q1 | ISSN: 1540496X | Publisher Name: Taylor and Francis |
| Pages : 37-52 | |||
| 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 : Develop quality, sustainable infrastructure Promote inclusive and sustainable industrialization Support infrastructure in developing countries |
| Impact statement: Testing purchasing power parity (PPP) in the black market has increased in recent years, driven by a puzzle in the literature: PPP is largely rejected in flexible exchange rate regimes. Many studies of PPP suffer from the problem of imposing symmetry and proportionality restrictions and fail to address the issues of stationarity and exogeneity. We address these issues in this paper by using monthly data from eight developing Asian countries over a thirty-one-year period. Even though the variables are cointegrated in a Johansen-Juselius framework, the domestic and foreign prices are not weakly exogenous in many countries, and a direct test rejects the PPP hypothesis. | Collaboration: Partner University | Keywords: PPP, Black Market Exchange Rates |
