| Summary: | 碩士 === 逢甲大學 === 經濟學所 === 94 === In this paper, we use the newly-developed and refined panel stationary test with structural breaks, as advanced by Carrion-i-Silvestre(2005), to examine long-run purchasing power parity(PPP) for US dollar real exchange rates of East Asian 10 countries during 1987-2005 period. The empirical results from numerous earlier panel-based unit root tests which do not take structural breaks into account indicate that purchasing power parity for all the countries we study here are non-stationary.
When we employ Carrion-i-Silvestre(2005) panel stationary test with structural breaks, we find that real exchange rates of 7 East Asian countries have three structural breaks and other countries have two structural breaks. Moreover, the real exchange rates of East Asian 10 countries are still exhibits a non-stationary process. In other words, evidence shows that the long-run purchasing power parity for East Asian 10 countries does not hold even if structural breaks are taken into consideration.
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