Analysis of Purchasing Power Parity with Data for Macedonia

UACS Annual Review of Trade 2011, ISBN 978‐608‐4607‐08‐3

17 Pages Posted: 1 Jul 2011 Last revised: 9 Jul 2012

See all articles by Dushko Josheski

Dushko Josheski

University Goce Delcev

Cane Koteski

University Goce Delcev

Date Written: June 29, 2011

Abstract

This paper examines PPP parity theory with data for Macedonia. We test the empirical consensus in this literature that real exchange rates tend towards PPP in the very long run, also we use co-integration Engle-Granger method and error correction mechanism. The hypothesis we test that PPP theory holds in long run in the case of Macedonia, and this hypothesis is proven to be true.

Keywords: PPP, Exchange Rate, Co-Integration, Unit Root, Stationarity

JEL Classification: E0

Suggested Citation

Josheski, Dushko and Koteski, Cane, Analysis of Purchasing Power Parity with Data for Macedonia (June 29, 2011). UACS Annual Review of Trade 2011, ISBN 978‐608‐4607‐08‐3, Available at SSRN: https://ssrn.com/abstract=1875047 or http://dx.doi.org/10.2139/ssrn.1875047

Dushko Josheski (Contact Author)

University Goce Delcev ( email )

Stip
Macedonia
+389 32 550 000 (Phone)
+389 32 390 700 (Fax)

HOME PAGE: http://www.ugd.edu.mk/

Cane Koteski

University Goce Delcev ( email )

PO box 201
Stip, 2000
Macedonia

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