Abstract
In this article we examine the theory of Purchasing Power Parity (PPP) on a sample of Central and Eastern European economies. This article makes two main advances with respect to previous PPP studies. First, it employs a monthly database on real exchange rates for a panel of 12 Central and Eastern European economies by testing the theory separately with respect to the US dollar and to the euro for the period January 1994 to December 2008. Second, we utilize, among other panel unit root tests, the panel Seemingly Unrelated Regressions Augmented Dickey–Fuller (SURADF) test proposed by Breuer et al. (2002), which allows us to identify how many and which members of the panel contain a unit root. As our study found support for the validity of PPP in some reforming European economies, special attention should be devoted to individual country-specific factors that cause PPP deviations.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
