Journal of Management and Science
Vol. 12 No. 1 (2022): Vol 12, Iss 1, Year 2022
Articles

Is purchasing powerparity hypothesis valid in ghana? an empirical assessment

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  • Samuel Asuamah Yeboah
Samuel Asuamah Yeboah
Faculty of Business and Management Studies, P. O. Box 206, Sunyani Technical University, Sunyani, Ghana
DOI: https://doi.org/10.26524/jms.12.17
Published March 31, 2022
Keywords
  • Purchasing Power Parity Hypothesis; Real Exchange Rate, Unit Root, Cointegration, Univariate variable.
How to Cite
Samuel Asuamah Yeboah. (2022). Is purchasing powerparity hypothesis valid in ghana? an empirical assessment. Journal of Management and Science, 12(1), 89-93. https://doi.org/10.26524/jms.12.17

Abstract

The paper examines the theory of Purchasing Power Parity (PPP) hypothesis to determine whether the hypothesis is valid for Ghana for the period 1960 to 2013, by employing the Augmented Dickey-Fuller (ADF) test and the Kwiatkwski, Phillips, Schmidt and Shin (KPSS) test on a single time series data to test the unit root properties of the real exchange rate (Official exchange rate).It is found that the real exchangerate hasa unit root or are non-stationary in levels. The findings suggest that the purchasing power parity hypothesis is not valid for the period under discussion.

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