Go to AfricaBib home

Go to AfricaBib home Africana Periodical Literature Go to database home

bibliographic database
Previous page New search

The free AfricaBib App for Android is available here

Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Does long run Purchasing Power Parity (PPP) hold within the Southern African Customs Union (SACU)?
Author:Makhetha, Masilo PhilemonISNI
Periodical:Review of Southern African Studies (ISSN 1024-4190)
Notes:biblio. refs.
Geographic term:Southern Africa
Subjects:exchange rates
Economics, Commerce
Purchasing power parity
foreign exchange
Southern African Customs Union
Abstract:This paper employs panel data unit root and co-integration tests, in the spirit of P. Pedroni (1997, 1998) and R. Larsson et al. (1998, 2001), to investigate the validity or otherwise of the Purchasing Power Parity (PPP) hypothesis within the SACU area of southern Africa. The PPP hypothesis is the hypothesis that exchange rates between currencies are determined in the long run by the amount of goods and services that each can buy. The Larsson et al. procedure is an extension of S. Johansen's (1988, 1995) methodology that allows for estimation of the number of co-integrating relations. This offers an interesting alternative to the residual based co-integration tests. The study employs quarterly time series data from four SACU member countries, namely, Botswana, Lesotho, Swaziland and Namibia, covering the period 1981-2000. It finds evidence in support of the validity of the PPP hypothesis for the SACU area. Bibliogr., sum. [Journal abstract, edited]