Structural Changes and Purchasing Power Parity in Turkish Exchange Rates

Authors : İlhan KÜÇÜKKAPLAN, Hüseyin AĞIR, Çağın KARUL, Ahmet KONCAK

Pages : 203-208

Doi:10.32709/akusosbil.471934

View : 24 | Download : 8

Publication Date : 2019-03-20

Article Type : Research Paper

Abstract :We re-examine the purchasing power parity (PPP) hypothesis for Turkey by concentrating on modelling structural changes as sharp (with dummy variables) and smooth (with a Fourier approximation) process. The results show (i) more evidence in favor of PPP hypothesis when structural changes are taken into account and (ii) modelling the shifts with different approaches plays a crucial role for policy implications. 
Keywords : PPP hypothesis, Structural shifts, Turkey