Özet:

Purchasing power parity theory is one of the oldest concepts of international economy which is frequently used by economists and policy makers. Purchasing power parity is a rate of change that eliminates global price diversity and equalizes purchasing power due to differences in currencies. In this study, the validity of SGP in developing countries was examined. For this purpose, unit root tests were carried out by using monthly real effective exchange rate data of 16 developing countries covering the periods of 1994.01-2019.05. In the application of unit root tests, the linearity of the series and whether it contains structural fracture gain importance. Furuoka (2017) proposed series F-testing, which allows comparison of four different methods under linearity and structural breaks. In this study, unlike the other studies in the literature, four methods were applied and according to F-test results, the best model was determined for each country. The results of the study were based on the Fourier ADF (FADF-SB) test results developed by Furuoka (2017) under nonlinear and structural changes and the validity of SGP theory is valid for 16 developing countries, including Turkey.

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