PURCHASING POWER PARITY IN LESS-DEVELOPED AND TRANSITION ECONOMIES: A REVIEW PAPER

The concept of purchasing power parity (PPP) has been the subject of numerous studies, many of which have been unable to prove conclusively this core principle of international finance. Although industrialized countries have received most of the attention, studies that focus on less‐developed and tr...

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Bibliographic Details
Published inJournal of economic surveys Vol. 23; no. 4; pp. 617 - 658
Main Authors Bahmani-Oskooee, Mohsen, Hegerty, Scott W.
Format Journal Article
LanguageEnglish
Published Oxford, UK Blackwell Publishing Ltd 01.09.2009
Subjects
Econometrics
Economic surveys
Economic theory
Exchange rates
International finance
International monetary economics
LDCs
Less developed countries
Purchasing power parity
Review articles
Studies
Transition economies
Trends
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Summary:The concept of purchasing power parity (PPP) has been the subject of numerous studies, many of which have been unable to prove conclusively this core principle of international finance. Although industrialized countries have received most of the attention, studies that focus on less‐developed and transition economies have also attained mixed results. This study surveys trends in this branch of the literature, highlighting the econometric advances that have sought to solve this puzzle, while pointing out that more needs to be done to address the reasons that might cause PPP not to hold.
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ISSN:0950-0804
1467-6419
DOI:10.1111/j.1467-6419.2009.00574.x