Economics, Econometrics and Finance
4 years ago

Panel unit root test rejects long-run PPP for ASEAN countries against Yuan.

2 views
MPRA Paper
Panel Unit Root Test with Nonlinear Mean Reversion and Smooth Breaks
Chi Keung Marco Lau, Frankie Chau, Rataporn Deesomsak

Paper Summary

The study developed a new test to check if the exchange rates of certain countries are in line with the Chinese Yuan in the long term. They found that the exchange rates of four major ASEAN countries do not follow the Chinese Yuan's value over time, supporting the idea of Purchasing Power Parity.

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