The literature on income inequality includes many studies that have tried to identify factors such as level of economic development, rate of economic growth, population growth, resource endowment, price instability, and openness as main determinant of income inequality. In this paper, we show...

This study applies the threshold autoregressive (TAR) method proposed by Caner and Hansen (2001) to test the validity of long-run purchasing power parity (PPP) in 14 transition countries, using monthly real effective exchange rates over the period January 1994- June 2012. The empirical results...

Purpose – Since the introduction of the concepts of the J- and S-curves, many researchers have tried to verify their validity empirically. This paper aims to review the related papers and to offer direction for future research. Design/methodology/approach – This is a review paper. As such,...

Previous studies that investigated the short-run (J-curve) and the long-run effects of currency depreciation on the trade balance of Pakistan used aggregate trade data between Pakistan and the rest of the world and provided no evidence of any significant impact. We wonder whether lack of the...

In theoretical literature, smuggling is considered as a factor contributing to the deviation of the PPP-based exchange rates from the equilibrium exchange rates with little empirical support. In this paper, we used panel data for 33 developing countries over the period 1982-1995 and used panel...

In 1950 Orcutt conjectured that a country¡¯s trade flows could respond to a change in exchange rate quicker than they do to a change in relative prices. Previous research that supported Orcutt¡¯s hypothesis employed non-stationary data rendering the results to suffer from spurious regression...