A quantitative assessment of real and financial integration in China - the Markov switching approach

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    Abstract

    In this paper, we use the newly developed Markov switching unit root test to examine the status of the real and financial integration of China, Japan, the European Union and the United States based on the empirical validity of real interest parity, uncovered interest parity and relative purchasing power parity. We find strong evidence in favour of those parity conditions and hence conclude that real and financial integration between China and the other four countries is well established.

    Original languageEnglish
    Pages (from-to)121-133
    Number of pages13
    JournalInternational Research Journal of Finance and Economics
    Volume39
    Publication statusPublished - 12 May 2010

    Bibliographical note

    Copyright:
    Copyright 2010 Elsevier B.V., All rights reserved.

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