Topics in Middle Eastern and North African Economies
Document Type
Article
Publication Date
9-2018
Abstract
Divergence of the purchasing power parity from the equilibrium exchange rate is attributed to various factors. Productivity differentials between the countries are said to be one of the main sources, which lead to productivity bias hypothesis. The hypothesis suggests that a relatively more productive country should experience a real appreciation of its currency. This research aims at testing the hypothesis in Middle East countries using the time series data over the period of 1970-2015 and by employing ARDL approach to cointegration. The econometric results support the hypothesis is only in the case of Bahrain, Kuwait and Saudi Arabia. This research also provides policy recommendations on the basis of empirical results.
Journal Title
Topics in Middle Eastern and North African Economies
Publisher
Middle East Economic Association and Loyola University Chicago
Volume
20
Issue
2
Recommended Citation
HALICIOGLU, Ferda and KETENCI, Natalya, "Testing the Productivity Bias Hypothesis in Middle East Countries". Topics in Middle Eastern and North African Economies, electronic journal, 20, 2, Middle East Economic Association and Loyola University Chicago, 2018, http://www.luc.edu/orgs/meea/
Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.
Copyright Statement
© 2018 The Authors
Comments
Presentation of the articles in the Topics in Middle Eastern and North African Economies was made possible by a limited license granted to Loyola University Chicago and Middle East Economics Association from the authors who have retained all copyrights in the articles.