Purchasing Power Parity – Does contract enforceability help solve the PPP puzzle (why deviations from PPP take so long to die out given that exchnge rates are so volatile)?.
have completed the literature review for my dissertation, but I need help with the empirical part. I have to show the effect of contract enforceability (which differs amongst countries – see for instance, doingbusiness.org) on the rate at which PPP deviations die out in several countries; perhaps contract enforceability helps explain why the PPP puzzle is smaller in certain countries than others. I have to collect time series data on real exchange rates in several countries, and data on contract enforceability differences among such countries to help show how contract enforceability affects deviations from PPP over the long run (e.g the results might suggest countries with better contract enforceability have real exchange rates that converge to PPP at a faster rate). Panel data could be useful perhaps to compare countries from certain geographical areas or contract enforceability levels. I’m looking for someone who has worked on PPP quite a lot before, perhaps even this question, to help me with the best way to tackle this question empirically; it would be great if you could show the appropriate regression and results with interpretation using software Stata or Eviews, preferably Stata. The better the empirical analysis the better – e.g. if running an Augmented Dickey Fuller Test describe features such as information/lag criterion used, weaknesses with the technique etc). The word limit is 4000 words. It would be great if I could be shown the best tests to run and some results with interpretation to help answer my question. I’ve attached my dissertation topic – mine is set topic 11 “The PPP puzzle” – my question is essentially listed in one of the bullet points – “Can the PPP puzzle be explained by difficulties in enforcing contracts across borders, perhaps due to differences in legal systems and languages/cultures?”. The “Data” section describes the data to collect. I understand this might be a lot to do in a day – please email me if you’ll need longer, or for more clarification. If you are happy to do the full 4000 words please tell me