Thesis (Ph. D.)--Ohio State University, 2006. / Title from first page of PDF file. Includes bibliographical references (p. 95-102).

Thesis (Ph. D. in Economics)--Vanderbilt University, Aug. 2005. / Title from title screen. Includes bibliographical references.

This thesis analyzes the effect of corporate tax rates on the purchasing-power-parity (PPP) doctrine. The data used to test this hypothesis are drawn from the U. S., the U. K., the Federal Republic of Germany, Canada, and Japan. The first chapter introduces the reader to the concepts of the PPP doctrine and states the hypothesis. Chapter 2 reviews the literature on the PPP doctrine. Chapter 3 specifies a model of the PPP doctrine including tax rates. Chapter 4 reports and interprets the findings. The study is summarized and conclusions are drawn in chapter 5. In this study it is shown that tax rates are significant only in the case of the U. S. dollar/Canadian dollar exchange rate.

The purpose of the study is to empirically determine the relevance of PPP theory under the traditional arbitrage and the efficient markets (EPPP) frameworks during the recent floating period of the 1980s. Monthly data was collected for fifteen industrial nations from January 1980 to December 1986. The models tested included the short-run PPP, the long-run PPP, the EPPP, the EPPP with deviations from expectations, the forward rates as unbiased estimators of future spot rates, the EPPP and the forward rates, and the EPPP with forward rates and lagged values. A generalized regression method called Seemingly Unrelated Regression (SUR) was employed to test the models. The results support the efficient markets approach to PPP but fail to support the traditional PPP in both the short term and the long term. Moreover, the forward rates are poor and biased predictors of the future spot rates. The random walk hypothesis is generally supported.

<p>According to the different studies regarding customs unions and monetary unions, both these types of economic integration will lead to increased trade which in turn affects the price level.</p><p>In this study, the changes in the price levels across Europe are investigated in order to see if the changes can be attributed to the EMU and the Euro. By using the PPPs calculated by OECD based on the theory of Purchasing Power Parity price levels in different countries become comparable between the countries and over time. The result is that there seems to be a clear convergence towards an average European price level in the observed period 1980-2005.</p><p>In order to investigate if this convergence is an effect of the EMU a panel regression on relevant data is run and the result shows that there has been a convergence in the EMU-price level, but it can most likely not be attributed to the Euro, but other factors like for example increased degrees of openness.</p>

According to the different studies regarding customs unions and monetary unions, both these types of economic integration will lead to increased trade which in turn affects the price level. In this study, the changes in the price levels across Europe are investigated in order to see if the changes can be attributed to the EMU and the Euro. By using the PPPs calculated by OECD based on the theory of Purchasing Power Parity price levels in different countries become comparable between the countries and over time. The result is that there seems to be a clear convergence towards an average European price level in the observed period 1980-2005. In order to investigate if this convergence is an effect of the EMU a panel regression on relevant data is run and the result shows that there has been a convergence in the EMU-price level, but it can most likely not be attributed to the Euro, but other factors like for example increased degrees of openness.

Purchasing power parity (PPP) is considered as an important theory of explaining how exchange rate varies in the long run. Most of empirical studies in the past adapted linear cointegration method to test the purchasing power parity. However, there are papers point out that exchange rate exists non-linear cointegration and unexplainable bias might exist in testing the purchase power parity theory while using linear cointegration test. The methodology of this study is based on an application of ESTR ECM proposed by Kapetaniosetet al. to enhance the inadequate of linear cointegration test. We analyze the dynamic adjusting behavior of short-term nominal exchange rate with ESTR ECM model while the non-linear cointegratoin exists. The empirical result indicates that the purchase power parity between Taiwan and its major trading countries is confirmed. Among the trading countries, American, Japan and Hong Kong are suitable for using linear error correction model and non-linear error correction model for Singapore and Korea.

The studies of exchange rate theory in international finance are divided into several schools. Purchasing Power Parity (PPP) is one important hypothesis in both the Monetary Exchange Rate theory and the main theory in the Open Macroeconomics Model. Although many models are found upon the existence of PPP, but it still has not been proved empirically. That is why it¡¦s important to examine the existence of PPP. In the past, the statistic analyzing processes are all made directly under the models since all variables have been assumed stationary. However, regressing two non-stationary variables may result in Spurious Regression. The Unit Roots Test and Cointegration Test are developed in order to avoid the problem of spurious regression. Therefore, Unit Roots Test and Cointegration Test should be applied to the variables before estimating during regression analyses. Concerning the power deficiency of Unit Roots Test and Cointegration Test, many researches have adopted the combination time-series and cross-section Panel Data Model in order to improve the power and limitation of small samples. The Panel-Unit Root Test and Panel-Cointegration Test have therefore been developed to avoid Spurious Regression. However, Panel-Unit Root Test and Panel-Cointegration Test are applied with long time-series and large cross-section. Nevertheless, obtaining the data has always been the toughest difficulty during empirical researches, let alone the need for long period and large unit data. These Panel Data Models can only be applied to studies for long period, but not to the short periods. In order to avoid these problems; Binder, Hsiao and Pesaran (2004) have developed the Short Panel Vector Autoregressions (sPVAR) Model, a Panel Data Model developed with short time-series and large cross-section. Therefore, this paper will focus on Purchasing Power Parity under the sPVAR Model with the examination of PPP for the 30 countries since the introduction of Euro (1998 to 2004).

The present thesis provides a definite answer to the question of how comparisons of certain aggregate quantities and price levels should be made across two or more geographic regions. It does so from the viewpoint of both economic theory and the “test” (or “axiomatic”) approach to index-number theory. Chapter 1 gives an overview of the problem of multilateral interspatial comparisons and introduces the rest of the thesis. Chapter 2 focuses on a particular domain of comparison involving consumer goods and services, countries and households in developing a theory of international comparisons in terms of the the (Kontis-type) cost-of-living index. To this end, two new classes of purchasing power parity measures are set out and the relationship between them is explored. The first is the many-household analogue of the (single-household) cost-of-living index and, as such, is rooted in the theory of group cost-of-living indexes. The second Consists of sets of (nominal) expenditure-share deflators, each corresponding to a system of (real) consumption shares for a group of countries. Using this framework, a rigorous exact index- number interpretation for Diewert’s “own-share” system of multilateral quantity indexes is provided. Chapter 3 develops a novel multilateral test approach to the problem at hand by generalizing Eichhorn and Voeller’s bilateral counterpart in a sensible manner. The equivalence of this approach to an extended version of Diewert’s multilateral test approach is exploited in an assessment of the relative merits of several alternative multilateral comparison formulae motivated outside the test-approach framework. Chapter 4 undertakes an empirical comparison of the formulae examined on theoretical grounds in Chapter 3 using an appropriate cross-sectional data set constructed by the Eurostat—OECD Purchasing Power Parity Programme. The principal aim of this comparison is to ascertain the magnitude of the effect of choosing one formula over another. In aid of this, a new indicator is proposed which facilitates the measurement of the difference between two sets of purchasing power parities, each computed using a different multilateral index-number formula.

Thesis (Ph. D.)--University of California, San Diego, 2000. / Vita. Includes bibliographical references.