The long-run validity of PPP in some major advanced and emerging countries using alternative models

Kyei-Mensah, Justice

doi:10.1080/23322039.2023.2220248

Cited by 2 publications

(1 citation statement)

References 49 publications

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“…It sought to establish an empirical link between financial development and international trade liberalization on deregulation and economic growth, and trade openness in developing and emerging countries' contexts particularly in African countries where less academic research has been conducted over the years. The region has experienced unprecedented overvalued exchange rates and high nominal exchange rate changeability; recorded increased volatility of real exchange rates and depreciation of the national currency, and reached high inflation and macroeconomic instability (Kyei-Mensah, 2023). Also, substantial proof of exchange rate pass-through as prices adjust (Chen and Hu, 2018) to economic reforms and overdependence on a few primary commodity exports (Ndikumana, 2015) in most developing and emerging countries.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Financial Development and International Trade on Deregulation

Justice Kyei-Mensah

2024

JABE

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This paper provides robust evidence of financial development and international trade liberalization on deregulation in some developing economies. Specifically, it investigates the effect of financial development and international trade liberalization on deregulation in 45 African countries in a panel set between January 1, 1980, to December 31, 2017. It employed the system Generalized Method of Moments (GMM) panel data estimation to address potential endogeneity concerns. Demir and Dahi (2011) showed that system GMM can effectively deal with any endogeneity issue originating from unobserved country-specific effects, and bias. The study found a robust positive effect of financial development and international trade liberalization on deregulation. The key finding was that technological impact is observed when private credit is regressed on market capitalization on Gross Domestic Product (GDP). It found that both GDP and gross per capita negatively impact financial development, conceivably causing the selected African countries’ markets to be insulated.

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Section: Introductionmentioning

confidence: 99%

The Effect of Financial Development and International Trade on Deregulation

Justice Kyei-Mensah

2024

JABE

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Exchange Rate Regimes in India: Central Bank Interventions and Purchasing Power Parity in the Context of ASEAN Currencies

Siddharth,

Alexiou,

Vogiazas

2024

Economies

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: In this study spanning four decades, we explored the relationship between the Reserve Bank of India’s (RBI) interventions and the validity of Purchasing Power Parity (PPP) across two distinct exchange rate regimes: the fixed exchange rate regime (1975–1993) and the managed floating regime (1994–2015). Applying an error correction model (VECM), our analysis reveals that under the fixed exchange rate regime, the environment is conducive to PPP due to frequent interventions by the RBI. However, in the managed floating regime, selective interventions weaken the applicability of PPP. These findings align with prior research but also hint at the limitations of linear models in capturing the intricate dynamics of PPP when central banks are involved. Nonlinear models may hold the key to unraveling the relationship more effectively.

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The long-run validity of PPP in some major advanced and emerging countries using alternative models

Cited by 2 publications

References 49 publications

The Effect of Financial Development and International Trade on Deregulation

The Effect of Financial Development and International Trade on Deregulation

Exchange Rate Regimes in India: Central Bank Interventions and Purchasing Power Parity in the Context of ASEAN Currencies

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