| Author(s) | Naief Al-Mutairi and Asraul Hoque |
| Affiliation | Department of Economics, Kuwait University and Techno-Economics Division, Kuwait Institute of Scientific Research, PO Box 24885, 13109 Safat, Kuwait |
| Title | A Cointegrating Test of the PPP Hypothesis: |
| Source | Journal of King Saud University. Administrative Sciences. Volume 12, No 1. (2000/1420) |
| Abstract | Abstract: The paper considers a test of cointegration to see if the purchasing power parity (PPP) hypothesis is tenable in the context of a capital-rich but otherwise developing country. We used quarterly data for Kuwait and the United States from the period 1972I to 1993IV to test the hypothesis. We found strong evidence in favor of cointegration (that is, a long-run equilibrium relationship in the relevant equation) and thus in favor of the hypothesis. This is in contrast to many empirical findings in the case of other non-OPEC and non oil-exporting countries. |
