PURCHASİNG POWER PARİTY STRUCTURAL BREAK UNDER THE CASE OF TURKEY: 2003-2018

Authors

  • Rüstem YANAR Gaziantep Üniversitesi, İİBF, İktisat Bölümü
  • Gülistan ZENGİN Gaziantep Üniversitesi, SBE, İktisat Doktora Öğrencisi

Keywords:

Purchasing Power Parity, Unit Root Test, Structural Fracture

Abstract

The purchasing power parity is a rate of change and this parity removes the price differences between the countries to bring the countries' currencies equal to the purchasing power, and country comparisons are also a critical indicator. The main objective of SGP is the international comparison of Gross Domestic Product (GDP) compounds. Real exchange rate, purchasing power hypothesis in the long run assumes constant. The single price law examines the influence of all goods on the economies of a single property like a law. In the comparison of the countries, the price level changes to the currency conversion rate by removing the difference. It equals the general price levels of the countries. Expenditures that convert from a foreign exchange rate to a common currency reveal not only the volume of goods and services purchased but also the price level differences between economies. The emergence of the purchasing power parity is attempting to reveal the similarities and disparities of real goods and service volume by eliminating the price level difference between countries. The purpose of this study, with unit root tests for the economy of Turkey 2003: 1-2018: 4 period is valid is to investigate whether purchasing power parity using monthly data. Conventional ADF KPSS unit root tests, the PP and structural break Zivot Andrews unit root test analyzed for purchasing power parity Turkey is tested to be valid. After the findings and the tests made, the results of the ADF unit root test and the PP unit root test are valid, while the SGP is valid, the KPSS unit root test and the Zivot Andrews fractured unit root test statistic SGP are invalid.

Published

2018-12-30

How to Cite

YANAR, R., & ZENGİN, G. (2018). PURCHASİNG POWER PARİTY STRUCTURAL BREAK UNDER THE CASE OF TURKEY: 2003-2018. Al Farabi Uluslararası Sosyal Bilimler Dergisi, 2(4), 158–164. Retrieved from https://alfarabijournal.com/index.php/pub/article/view/175

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