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| Content Provider | Springer Nature Link |
|---|---|
| Author | Breitung, Jörg Candelon, Bertrand |
| Copyright Year | 2005 |
| Abstract | We investigate the stationarity of real exchange rates using a panel of Asian and South and Latin American countries by applying a new panel unit root test that is robust to structural breaks due to currency crises. It turns out that the long-run PPP relationship is relevant for the Asian countries, which experienced a flexible exchange rate, whereas for the South and Latin American countries, for which the exchange rate has been pegged to the U.S. dollar for a long time, the PPP relationship breaks down. In Asian countries PPP appears to hold before the 1997 crisis, which is not the case for the South and Latin American countries. This suggests that the “Asian flu” corresponds to a second-generation type of crises, whereas the 1995 “Mexican tequila” fits the first-generation models better. |
| Starting Page | 124 |
| Ending Page | 140 |
| Page Count | 17 |
| File Format | |
| ISSN | 16102878 |
| Journal | Weltwirtschaftliches Archiv |
| Volume Number | 141 |
| Issue Number | 1 |
| e-ISSN | 16102886 |
| Language | English |
| Publisher | Springer-Verlag |
| Publisher Date | 2005-01-01 |
| Publisher Place | Berlin, Heidelberg |
| Access Restriction | One Nation One Subscription (ONOS) |
| Subject Keyword | Panel data unit root tests structural breaks PPP currency crisis Economics general International Economics |
| Content Type | Text |
| Resource Type | Article |
| Subject | Economics, Econometrics and Finance |
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