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PPP TESTS IN COINTEGRATED PANELS: EVIDENCE FROM ASIAN DEVELOPING COUNTRIES
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Abstract
This paper tests the relative version of purchasing power parity (PPP) for a set of ten Asian developing countries using panel cointegration framework. We employ ¡®between-dimension¡¯ dynamic OLS estimator as proposed by Pedroni (2001b). The test results overwhelmingly reject the PPP hypothesis.Purchasing Power Parity, Panel Cointegration, Unit Roots.