This paper addresses whether parallel market exchange rates in Africa behave in the long run in a manner consistent with the purchasing power parity (PPP) hypothesis. A recent econometric method, the panel co-integration test, enables us to examine the long-run PPP hypothesis by pooling the...

This paper addresses whether parallel market exchange rates in Africa behave in the long run in a manner consistent with the purchasing power parity (PPP) hypothesis. A recent econometric method, the panel co-integration test, enables us to examine the long-run PPP hypothesis by pooling the...

The long-run purchasing power parity (PPP) concept is empirically studied using the parallel market exchange rates of 17 African countries and employing the panel cointegration method. This approach is particularly useful when analysing African countries, which do not have long time-series. This...