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Asian currency crisis and the generalized PPP: Evidence from the Far East

Asian currency crisis and the generalized PPP: Evidence from the Far East
Asian currency crisis and the generalized PPP: Evidence from the Far East
The present paper investigates the effects of the Asian currency crisis of 1997–1998 on the generalized PPP between several real exchange rates of the Far East countries. Monthly log of real exchange rates of the currencies of Thailand, Malaysia, Indonesia, the Philippines and South Korea vis-à-vis the US dollar and the Japanese yen during 1990–2004 are applied in the investigation. Further tests are conducted between exchange rates vis-à-vis the Thai baht.
Tests are conducted for periods before and after the crisis. Results from the Johansen method of multivariate cointegration show a substantial change in the relationship between these real exchange rates before and after the Asian currency crisis. This result is found using rates based on three currencies: US dollar, yen and baht.
real exchange rate, generalized purchasing power parity, johansen cointegration
137-157
Choudhry, Taufiq
6fc3ceb8-8103-4017-b3b5-2d38efa57728
Choudhry, Taufiq
6fc3ceb8-8103-4017-b3b5-2d38efa57728

Choudhry, Taufiq (2005) Asian currency crisis and the generalized PPP: Evidence from the Far East. Asian Economic Journal, 19 (2), 137-157. (doi:10.1111/j.1467-8381.2005.00208.x).

Record type: Article

Abstract

The present paper investigates the effects of the Asian currency crisis of 1997–1998 on the generalized PPP between several real exchange rates of the Far East countries. Monthly log of real exchange rates of the currencies of Thailand, Malaysia, Indonesia, the Philippines and South Korea vis-à-vis the US dollar and the Japanese yen during 1990–2004 are applied in the investigation. Further tests are conducted between exchange rates vis-à-vis the Thai baht.
Tests are conducted for periods before and after the crisis. Results from the Johansen method of multivariate cointegration show a substantial change in the relationship between these real exchange rates before and after the Asian currency crisis. This result is found using rates based on three currencies: US dollar, yen and baht.

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More information

Published date: 2005
Keywords: real exchange rate, generalized purchasing power parity, johansen cointegration

Identifiers

Local EPrints ID: 37448
URI: http://eprints.soton.ac.uk/id/eprint/37448
PURE UUID: 968ac1e9-4722-4f97-a0b3-1674d090f29f
ORCID for Taufiq Choudhry: ORCID iD orcid.org/0000-0002-0463-0662

Catalogue record

Date deposited: 23 May 2006
Last modified: 16 Mar 2024 03:16

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