Purchasing Power Parity Hypothesis: Empirical Validity of Purchasing Power Parity in the Long Run among the Developing and Developed Countries Using Co-integration and OLS Techniques.

This study finds the empirical validity of exchange rate and price relationship implied by purchasing power parity among the seven countries .i.e. (Australia, Canada, Pakistan, India, Japan, Spain and Korea) using the Augmented Dickey Fuller, Engel Granger, Johansen and ordinary least squares econometrics techniques based on quarterly data instead of annually data .We have used both developing and developed countries in the PPP testing and compared the econometric results of developing and developed countries with each other. Using the quarterly data over the time period of 1961 to 2010, We have found the long run validity of purchasing power parity theory among the three developing and four developed countries. We have applied different econometric methodologies, PPP results differ among different econometric techniques. So, it can be implied that choice of price level and appropriate econometric methodology is very important in the PPP testing. Keywords: Purchasing power parity; Exchange rate; Developed and Developing countries

DOES GOVERNMENT SPENDING GROWTH EXCEED ECONOMIC GROWTH IN SAUDI ARABIA?

Abstract This study was carried out to examine Wagner's Law in case o

Outward foreign direct investment and domestic investment: evidence from China

This paper examines the relationship between outward foreign direct investment (OFDI) and domestic investment (DI) in China using cointegration and Granger causality analyses (including bivariate and multivariate Granger causality models). The results suggest that the conclusions drawn from a bivariate model may not be valid because of the omission of important control variables. The results of the multivariate model show that there is a positive long-run unidirectional causal relationship running from OFDI to DI In the short run, DI and OFDI do not show Granger causality

Do government expenditure and financial development impede environmental degradation in Venezuela?

Environmental degradation is causing global warming, which is of the utmost concern to both physical and social scientists. A number of potential determinants of environmental degradation are analysed in the literature. This study examines the role of government expenditure and financial development in environmental degradation in the context of the environmental Kuznets curve (EKC) hypothesis for the Venezuelan economy. Time series data have been analysed for this purpose. The long-term relationship between the variables in this study is established through a bounds test in the presence of an unknown structural break. The results of this study confirm the EKC hypothesis. It is found that energy use is harming the quality of the environment not only in the long run but also in the short run. This study finds a positive impact of government expenditure on environmental degradation, which indicates that the Venezuelan government is not taking its expenditure for a sustainable environment into account. Moreover, this study finds that financial development is hindering environmental degradation. This means that financial institutions in Venezuela can help to develop the concept of sustainable energy in the country and the Venezuelan government can reduce carbon emissions through financial development