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| Soo Khoon Goh, Yanru Yu, Chung Yan Sam and Tuck Cheong Tang |
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| ''Purchasing power parity (PPP) in developed countries: updated evidence from multivariate ARDL unit root test'' |
| ( 2025, Vol. 45 No.2 ) |
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| This study re-examines the purchasing power parity (PPP) hypothesis for six developed countries, addressing the inconsistent evidence in the existing empirical literature. By applying a newly developed multiple autoregressive distributed lag (MARDL) unit root test, this study updates that both real and real effective exchange rates of the UK, Canada, Australia, Japan, Switzerland, and New Zealand (with the US as a covariate) are non-stationary, I(1) for 2000m1-2023m12, suggesting that the PPP does not hold. |
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| Keywords: Covariate, Multivariate ARDL, Purchasing Power Parity (PPP), Unit root test |
JEL: C2 - Single Equation Models; Single Variables: General
H3 - Fiscal Policies and Behavior of Economic Agents: General |
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| Manuscript Received : Apr 23 2025 | | Manuscript Accepted : Jun 30 2025 |
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