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Gözgör, Giray (Dogus Author) As an emerging economy, Turkey has suffered from high unemployment rate, as well as major discrepancies among regional unemployment rates, even in the periods of rapid economic growth. In this study, we mainly investigate the unemployment persistence at the regional level for Turkey, and we apply recent and powerful Panel-based Unit Root (PUR) tests, when the panels have small time series dimensions and cross-sections in highly persistent data. Results from the PUR tests clearly show that the existence of the unemployment persistence in most of the regional unemployment rates of Turkey. By using same PUR tests, we also test the possible divergence in regional inflation rates in same data for evaluating further monetary policy implications. Our findings show that national monetary policy can efficiently impacts on most of Turkish regions.

This paper aims to investigate stochastic properties of the consumption-income ratios in eleven central and eastern European (CEE) countries: Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia. The heterogeneous panel unit root tests are used to account for cross-sectional dependence and the Modified Augmented Dickey-Fuller unit root test over the period March 1997 - September 2012. The half-lives are also calculated as to find the strong mean-reversion in the consumption-income ratio for nine of eleven CEE economies; and the exceptions are Croatia and Slovenia. In other words, empirical findings provide significant support for the existence of hypothesis that the consumption-income ratio is a mean reversion. Accordingly, the policy implications have permanent effects on the consumption of households only in Croatia and Slovenia.

This paper investigates whether the purchasing power parity (PPP) hypothesis holds in the Czech Republic, Hungary, and Poland by considering currencies of their five largest trading partners. We employ eight panel unit root tests that can be arranged in groups by cross-section independence or dependence. Empirical findings show that the stochastic behavior of real exchange rates in the Czech Republic and Poland is not a mean reversion, and the PPP condition does not hold for them. However, we obtain mixed empirical evidence in Hungary. Limited evidence is found for validity of the PPP hypothesis among currencies of Hungary's largest trading partners.

Gözgör, Giray (Dogus Author) In this paper, we employ some front page panel unit root tests to examine the validity of the purchasing power parity hypothesis in Turkey. Using monthly observations panel data of nine major county's currency dates January 2003 through April 2010, we find that panel unit root tests rejected the mean-reversion of real exchange rates. Thus, the empirical results indicate significant support for the purchasing power parity holds in Turkey.