Omay, TolgaOmay, TolgaShahbaz, MuhammedHasanov, MubarizEconomics2024-07-052024-07-052020150003-68461466-428310.1080/00036846.2020.17132932-s2.0-85078476070https://doi.org/10.1080/00036846.2020.1713293https://hdl.handle.net/20.500.14411/3435Hasanov, Mubariz/0000-0003-0216-9531; Hasanov, Mübariz/0000-0003-0216-9531We test the empirical validity of the PPP proposition under temporary structural breaks and dynamic nonlinear adjustments. Although several testing procedures have recently been proposed in the existing literature to investigate stochastic properties of the series under gradual breaks and nonlinear adjustments, none of these tests are compatible with the PPP proposition. Therefore, we propose new testing procedures that restrict the break to be temporary while simultaneously allowing for asymmetric dynamic nonlinear adjustment towards equilibrium. Using these newly proposed tests, we test stationarity of real exchange rate of 24 OECD countries vis-a-vis USA, and find support in favour of PPP proposition in majority of the countries.eninfo:eu-repo/semantics/closedAccessPPPTemporary Gradual BreakNonlinear Symmetric and Asymmetric Dynamic AdjustmentsArticleQ2523234793497WOS:000508345900001