Testing the PPP hypothesis in the sub-Saharan countries

  1. Guglielmo Maria Caporale 1
  2. Luis A. Gil-Alana 2
  1. 1 Brunel University London
    info

    Brunel University London

    Uxbridge, Reino Unido

    ROR https://ror.org/00dn4t376

  2. 2 Universidad de Navarra
    info

    Universidad de Navarra

    Pamplona, España

    ROR https://ror.org/02rxc7m23

Journal:
Journal of African Studies and Development

ISSN: 2141-2189

Year of publication: 2013

Volume: 5

Issue: 4

Pages: 57 - 63

Type: Article

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Abstract

This paper examines the Purchasing Power Parity (PPP) hypothesis in a number of Sub-Saharan countries by testing the order of integration in the log of their real exchange rates vis-à-vis the US dollar. I(d) estimation techniques based on both asymptotic and finite sample results are used. The test results led to the rejection of PPP in all cases: orders of integration below 1 are found in fourteen countries, but the unit root null cannot be rejected.