In this article, we re-investigate the validity of Purchasing Power Parity (PPP) for a sample of 10 East-Asia countries over the period of January 1987 to June 2005, using a recently developed econometric technique of the panel stationary test with multiple structural breaks, proposed
by Carrion-i-Silvestre et al. (2005). This test considers multiple structural breaks positioned at different unknown dates and a different number of breaks for each individual. Empirical evidence shows that the PPP holds true for half of 10 East-Asia countries during the research
period. Our results have important policy implications for these 10 East-Asia countries under study.
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Document Type: Research Article
Department of Finance,Feng Chia University, Taichung, Taiwan
Department of Finance,Ming-Chung University, Taipei, Taiwan
Department of Finance, National Chung Hsing University, Taichung, Taiwan
Publication date: 2011-09-01
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