PURCHASING POWER PARITY AND ITS VALIDITY IN THE SOUTH ASIAN COUNTRIES

 

Purna Chandra Parida
Maathai K Mathiyazhagan
G Nancharaiah

 

Abstract

This paper examines the validity of Purchasing Power Parity (PPP) in the context of South Asian countries namely India, Sri Lanka and Pakistan. The study verifies the PPP hypothesis that it is more pronounced either in developed countries as a group or developing countries but not between developed and developing countries. The study uses the Cointegration technique and concludes that PPP is quite feasible among the South Asian countries with India as a base country.

Working Papers