Lee, Chin (2010): Purchasing power parity and free trade area. Published in: The Empirical Economics Letters , Vol. 9, No. 10 (2010): pp. 1003-1008.
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The aim of this paper is to apply recently developed panel cointegration techniques proposed by Pedroni (1999, 2004) to evaluate the effectiveness of various regional trade agreements by examine the goods market integration between trading partners using purchasing power parity (PPP). The results obtained from panel cointegration tests strongly support the validity of long-run PPP in almost all cases. Evidence of price convergence suggested that the panel countries of free trade areas (FTAs) are integrated, hence FTAs has fostererd the price convergence.
|Item Type:||MPRA Paper|
|Original Title:||Purchasing power parity and free trade area|
|Keywords:||purchasing power parity, economic integration, free trade area, panel cointegration test|
|Subjects:||F - International Economics > F1 - Trade > F15 - Economic Integration
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation
F - International Economics > F3 - International Finance > F31 - Foreign Exchange
|Depositing User:||Chin Lee|
|Date Deposited:||02. Aug 2012 12:52|
|Last Modified:||15. Feb 2013 05:58|
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