TITLE:
GDP Purchasing Power Parity per Capita and Its Determinants: A Panel Data Analysis for BRICS
AUTHORS:
S. Venkata Seshaiah, Trilochan Tripathy
KEYWORDS:
GDP, Panel Data Analysis, BRICS
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.3,
February
14,
2018
ABSTRACT: This study examines the Gross Domestic product
purchasing power parity per capita (GDP PPP per capita) and its determinants
using the panel data method to test for unit roots in Brazil, Russia, India,
China, and South Africa (BRICS). The main dependent variable in our study is
GDP PPP per capita while the independent variables are real exchange rate, real
interest rate, consumer price index (CPI), and money supply. We find strong
evidence of a long-run relationship among the chosen variables. The
co-integration equation reveals positive relationship between GDP PPP per
capita and the real exchange rate, real interest rate, and money supply and a
negative relationship between GDP PPP and CPI. Based on the VEC Granger
Causality/Block Erogeneity Wald Tests, the study finds that the GDP PPP per
capita is influenced by the exchange rate and CPI. However, based on the
overall Chi-square test, the study shows strong evidence of an influence of all
variables on GDP PPP per capita. We hope this study would help the
policy makers to come up with appropriate policies to bring about homogeneity
among the BRICS nations.