drift in the relative price of primary commodities a case where we care about unit roots the evidence for the prebisch singer hypothesis of a downward drift over time in the relative price of primary commodities is considered the apparent strength of that evidence appears to depend to a substantial degree on whether the time series of relative prices is assumed to be trend stationary or integrated of order one moreover the usual econometric tests are relatively uninformative on this question these conclusions emerge whether or not a structural break in the series is permitted

strikes as a result of imperfect information this paper proposes a model of the bargaining process that recognizes that negotiators have only imperfect information at their command the author argues that the probability of a strike occurring will increase if one party bases its perception of the opponent s position on the same variables employed to form its own position when the opponent s position is in fact based on different variables strike probability is therefore assumed to be related to movements in variables of interest to only one side the model is tested on a sample of fourteen bargaining relationships drawn from the series wage chronology published by the bureau of labor statistics which details settlements between particular firms and unions over a period of about thirty years estimates of strike probability are derived from the maximum likelihood logit procedure the findings suggest that although both relative and absolute wage increases in a firm have a negative effect on strike frequency relative changes are more important

information on strikes and union settlements patterns of coverage in a newspaper of record the authors investigate whether the new york times coverage of strikes and non strike wage settlements in large bargaining units changed during the 1980s a time when a transformation of industrial relations is said to have taken place although the total number of new york times articles on such events declined during the 1980s the authors find that when appropriate control variables are included in the analysis the apparent drop in coverage disappears important variables determining the extent of news coverage were occurrence of a strike strike duration number of workers involved occurrence of federal intervention key industry status that is whether the affected industry was among those industries identified as exceptionally important for wage setting and proximity to new york city they speculate that the reduced number of articles may simply reflect a decreased incidence of strikes

strikes and holdouts in wage bargaining theory and data we develop a private information model of union contract negotiations in which disputes signal a firm s willingness to pay previous models have assumed that all labor disputes take the form of a strike yet a prominent feature of u s collective bargaining is the holdout negotiations often continue without a strike after the contract has expired production continues with workers paid according to the expired contract we analyze the union s decision to strike or hold out and highlight its importance to strike activity strikes are more likely to occur after a drop in the real wage or a decline in unemployment

the influence of motivations and environment on business start ups some hints for public policies abstract this paper examines entrepreneurial motivations to start a business in different perceived environmental settings motivations to start a business for a sample of 163 entrepreneurs from growing and declining regions in the north center and south of italy were factor analysed in order to identify the main groupings of variables that lead people to start their own business the results proved to be highly consistent with friberg s 1975 1976 findings on incentives to start a business the motivation factor scores were then clustered and three verv different classes of entrepreneurs were identified each driven by very different sets of motivations self actualizers who started their business driven by a thirst for achievement and a sense of independence and autonomy discontented entrepreneurs unhappy with present working conditions and followers of family tradition role models the relationship between individuals motivations and their perceptions of the environment was then investigated resources and incentives to start a business were factor and cluster analyzed to yield three very different types of perceived environments munificent environments characterized by efficient infrastructures established capital markets and the availability of incentives to start a business supportive environments in which the creation of an infrastructure specifically aimed at encouraging new companies could lead to a significant increase in entrepreneurship sparse environments lacking both infrastructure and capital availability the proportions of entrepreneurial types differ significantly in each environment government intervention in stimulating the diffusion of entrepreneurship is legitimized by the role new companies play in job and wealth creation and the diffusion of innovation within a territory these results suggest some implications for public policies instead of blanket incentive policies applied on a wide geographical basis policies tailored on a local basis may be more effective in stimulating new venture creation

unions and strikes with asymmetric information strikes seem to be a pareto inefficient outcome of bargaining between a union and a firm however this paper shows that strikes can be the outcome of rational behavior by both agents if the firm has more information than the union concerning the state of nature the union can use strikes as a way of gaining information the paper uses an asymmetric information model where the firm has information about the state i e profitability that the union does not know the schedule of wage offers by the union then depends on the probability that a given state will occur

does fact finding promote settlement theory and a test nonbinding recommendations such as provided by fact finders are shown to significantly increase voluntary settlements in bargaining theoretically it is unclear whether recommendations will increase settlement rates a recommendation may reduce outcome uncertainty thereby chilling bargaining and increasing dispute rates on the other hand a recommendation may give the parties a focal point around which an agreement is made which of these effects dominates is a question that we consider using theory and data from controlled bargaining experiments the data show the dominance of a focal point effect for suggestions highlighting their potential role in improving dispute settlement procedures

is strike behavior cyclical we examine cyclicality of strike frequency and incidence using canadian data on strikes and contracts total strike frequency exhibits significant procyclicality to which within contract strikes contribute appreciably evidence is weaker for procyclical behavior of contract expiry strikes both in total and disaggregated by issue strike incidence is also procyclical particularly in manufacturing though the procyclicality here is confined to strikes over nonwage issues these results mirror those obtained by analyzing the frequency of strikes in the contract data industry specific cyclical variables positively affect strike incidence in manufacturing but region specific variables have no effect

on the prevalence of trends in primary commodity prices abstract this paper applies new time series procedures to examine the prebisch singer hypothesis of a secular deterioration in relative primary commodity prices specifically we allow for up to two structural breaks in 24 price series covering the 1900 98 period for the majority of commodities it is shown that the trend is not well represented by a single downward slope but instead by a shifting trend that often changes sign over the sample period unlike some recent work that has also allowed for structural breaks these results provide much less support for the prebisch singer hypothesis

global oil prices and local food prices evidence from east africa it is widely believed that oil prices impact food prices in developing countries yet rigorous evidence on this relationship is scarce using maize and petrol price data from east africa we show that global oil prices do affect food prices but primarily through transport costs rather than through biofuel or production cost channels we find that global oil prices transmit much more rapidly to the pump and then to local maize prices than do global maize prices suggesting that the immediate effects of correlated commodity price shocks on local food prices are driven more by transport costs than by the prices of the grains themselves furthermore we present suggestive evidence that for markets furthest inland changes in world oil prices have larger effects on local maize prices than do changes in world maize prices

the commodity terms of trade unit roots and nonlinear alternatives a smooth transition approach market price dynamics for north american oriented strand board markets are examined specifically the role of transactions costs are examined vis a vis the law of one price weekly data for the january 3rd 1995 through april 14th 2006 period are used in the analysis nonlinearities induced by unobservable transactions costs are modeled by estimating smooth transition autoregressions stars results indicate that nonlinearity is an important feature of these markets and that the parity relationships implied by economic theory are generally supported by the star models implications for the efficiency of spatial market linkages are examined by estimating generalized impulse response functions

the empirical relations between employers striker replacement strategies and strike duration this analysis of general accounting office survey data on strikes in 1985 and 1989 shows that employers permanent replacement of striking workers was associated with longer strikes than would otherwise have occurred furthermore the authors find that simply announcing the intent to replace strikers was also associated with longer strikes finally when employers permanently replaced strikers the probability of settlement fell approximately 30 these findings are consistent with models focusing on the joint costs of a strike and on private information in the bargaining process t o the firm that seeks to operate during a strike a major obstacle is securing a work force to do the work normally performed by members of the striking bargaining unit of the four possible strategies for securing such a work force reassigning struck work to non bargaining unit employees utilizing members of the bargaining unit who return to work during the strike hiring temporary replacement employees and hiring permanent replacement employees the strategy of hiring permanent replacements for strikers has become the most controversial before the passage of new deal labor legislation u s employers regularly exercised their common law right to replace striking workers the wagner act of 1935 protected employees right to strike but did not explicitly grant employers the right to replace strikers the supreme court however upheld the legality of permanently replacing strikers in its 1938 decision nlrb v mackay radio

high yield bond and energy markets abstract high yield bonds hold a particularly unique space in the debt market from many aspects literature suggests these assets to behave more like stocks than bonds given the significant similarities between the high yield bond and stock markets it is expected for these markets to be similarly affected by certain outside factors some shocks including the ones from energy markets are known to impact the entire stock market and not just related company shares since high yield bond portfolios include some amount of energy company debt the recent volatility in energy prices has been particularly concerning to market participants however the question of whether price and volatility shocks only impact energy company bonds or the entire high yield bond market as they do with the stock market still remains unanswered this study attempts to address that question by exploring the dynamic relationships between the high yield bond and energy markets price transmission tests which account for gradual structural shifts suggest oil and ethanol markets significantly impacting the high yield bond market furthermore volatility tests find uni directional volatility transmitting from energy markets to the high yield bond market

the financialization of food commodity equity and cross commodity return co movements rose dramatically after the 2008 financial crisis this development took place following what has been dubbed the financialization of commodity markets

unit roots flexible trends and the prebisch singer hypothesis abstract this paper studies the dynamic properties of relative commodity prices especially the prebisch singer hypothesis on their secular decline using a new family of unit root tests based on the fourier approximation to the data s underlying trend the approximation controls for low frequency variations such as structural breaks or the long swings induced by hypothesized super cycles in the data regarding the extant literature we find considerably more evidence against nonstationarity in relative commodity prices and very limited support for the prebisch singer hypothesis

the role of el nino southern oscillation in commodity price movement and predictability how are commodity prices related to the el nino southern oscillation enso cycle and has this relationship altered over time despite overwhelming evidence suggesting an important role played by the enso in global commodity production the relationship between this climate anomaly and prices is not a trivial corollary and requires careful investigation to account for potentially complex dynamics in the enso price relationship this study applies a time varying smooth transition autoregressive tv star modeling framework to monthly series of the sea surface temperature anomalies in the nino3 4 region and 46 primary commodity prices spanning the january 1982 december 2015 period the findings suggest apparent linkages between enso shocks and a set of agricultural commodities as well as forestry commodities and metals an unexpected deviation in enso results in two to five percentage point change in prices while up to 30 percent of price variation in the selected commodities can be attributed to enso shocks in the intermediate and long run importantly there are benefits to regime dependent modeling which in some instances facilitates unveiling causal linkages that may have been camouflaged in a linear setting several commodity prices also reveal evidence of structural change and in those instances the enso effect appears to have been mitigated over time suggesting some adaptive response to the known economic consequences of this climate anomaly

co movement of major energy agricultural and food commodity price returns a time series assessment abstract using monthly data between 1970 and 2013 we provide a comprehensive analysis of the extent of co movement measured by correlation coefficients among the nominal price returns of 11 major energy agricultural and food commodities we study the degree and the time evolution of unconditional and conditional correlations using a uniform spacings estimation and testing approach multivariate dynamic conditional correlation models and a rolling regression procedure we find that 1 the price returns of energy and agricultural commodities are highly correlated 2 the overall level of co movement among commodities increased in recent years especially between energy and agricultural commodities and in particular in the cases of maize and soybean oil which are important inputs in the production of biofuels and 3 the stock market volatility is positively associated with the co movement of price returns across markets especially after 2007

nonparametric nonlinear cotrending analysis with an application to interest and inflation in the united states given the assumption that the components of a vector time series are stationary around nonlinear deterministic time trends nonlinear cotrending is the phenomenon that one or more linear combinations of the time series are stationary around a linear trend or a constant hence the series have common nonlinear deterministic time trends in this article i develop nonparametric tests for nonlinear cotrending and i derive nonparametric estimators of the cotrending vectors i apply this approach to the federal funds rate and the consumer price index inflation rate in the united states using monthly data to analyze the price puzzle

potential pitfalls in determining multiple structural changes with an application to purchasing power parity we investigate the empirical performance of the bai and perron multiple structural change tests and show that the use of their critical values may cause severe size distortions in persistent series to correct these size distortions while maintaining a good power we implement the bai structural change test and extend it in two directions developing a new procedure to choose the number of breaks and a restricted version that specifically models breaks that imply mean or trend reversion using our new methodologies we reconcile the results of unit root tests with those of tests for structural change when testing for long run purchasing power parity

disentangling supply and demand shifts the impacts on world salmon price to understand price changes one must determine the relative impact of supply and demand shifts on price conditional on predetermined supply and demand elasticities we retrieve yearly shifts in regional supply and demand the relative impact on price from each supply and demand shift is determined through an equilibrium displacement model edm this procedure is applied on a yearly basis for the world salmon market in the period 2002 to 2011 the results indicate a large variation in demand and supply growth both over time and between regions while average annual price impacts from supply or demand shifts from most regions are not statistically significant price impacts from supply or demand shifts for specific periods are detected in all but one region this indicates that the use of smooth trend indicators is likely to be inappropriate for measuring supply and demand shifts and their impacts on price the procedure presented in this article can be a useful instrument for determining the relative im

a new approach to energy consumption per capita stationarity evidence from oecd countries abstract applying a new panel stationary test procedure to data from 32 oecd countries from 1971 to 2013 this study examines the time series properties of per capita energy consumption the results indicate that energy consumption per capita follows a mean reverting process for 16 oecd countries whereas for the remaining 16 oecd countries a mean reverting process is not the case besides energy consumption per capita exhibits some sharp and smooth structural shifts breaks in its mean and or trend levels and the endogenously identified break dates correspond to specific macroeconomic events such as oil crises gulf war asian and global financial crises these results also have important policy implications for the 16 oecd countries that have stationary energy consumption per capita series government policies intended to stabilize energy demand will have no long lasting effects and therefore governments should not adopt unnecessary policy targets for energy demand level however for the remaining 16 oecd countries such policies will have long lasting effects

rising food prices food price volatility and social unrest can food prices cause social unrest throughout history riots have frequently broken out ostensibly as a consequence of high food prices using monthly data at the international level this article studies the impact of food prices food price levels as well as food price volatility on social unrest because food prices and social unrest are jointly determined data on natural disasters are used to identify the causal relationship flowing from food price levels to social unrest results indicate that for the period 1990 2011 food price increases have led to increases in social unrest whereas food price volatility has not been associated with increases in social unrest these results are robust to alternative definitions of social unrest to using real or nominal prices to using commodity specific price indices instead of aggregated price indices to alternative definitions of the instrumental variable to alternative definitions of volatility and to controlling for non food related social unrest

cyclical fluctuations in strike durations canadian data on strikes between 1946 and 1983 are used to estimate linear regression models for the logarithm of completed duration a thorough investigation of the influence of the business cycle reveals strong support for the hypothesis that strike durations are countercyclical the cyclical effect is shown to be robust to both the choice of cyclical variable and the econometric specification and the magnitude of the effect is quite substantial experimentation with different representations of the cycle reveals that it is difficult to improve on a simple formulation involving a single continuous variable

does cooperation enhance competitiveness assessing the impacts of inter firm collaboration abstract collaboration among small and medium sized enterprises smes is an emerging approach to industrial competitiveness since first noted in western europe governments agencies and private foundations have experimented with policies to stimulate and accelerate forms of inter firm collaboration commonly called manufacturing networks the assumption behind such policies is that cooperative behavior will help smes firms compete and therefore the goal is to alter the behavior of enterprises and to facilitate co operation these strategies are part of an emerging national effort to stimulate industrial modernization through a variety of interventions state legislatures and government agencies being asked to invest in network initiatives want to know whether they are meeting their goals and what impacts they are having on their state regional and national economies while investments small in scale expectations are high this article draws on two evaluations of network initiatives one sponsored by a state and one by a private foundation to discuss issues methodologies evidence of impacts and challenges the first evaluation requested by for the oregon economic development department occurred at an early stage in the process and therefore was limited to the process and early industry responses the second requested by the northwest area foundation was over the 3 year grant period and also included some measures of change among participating smes both however illustrate the difficulties in trying to attribute bottom line changes in a business and economic changes in an economy to relatively small and indirect interventions and the need for additional research on measures and methodologies

providing business information to production workers correlates of compensation and profitability this study investigates some of the effects of a company s providing production workers with information on its financial condition productivity and relative standing in the labor market analyzi

sharp breaks or smooth shifts an investigation of the evolution of primary commodity prices this paper explores the behavior of real commodity prices over a 50 year period attention is given to how the shifting means for various commodity prices have changed with a special emphasis on behavior since the mid 2000s to identify structural changes in commodity prices we estimate shifting mean autoregressions by using the bai and perron 1998 procedure for determining structural breaks low frequency fourier functions and a procedure that specifies shifts to be smooth logistic functions of time we find that the pattern in the timing of shifts is suggestive of the causal factors underlying the recent boom

the prebisch singer hypothesis four centuries of evidence we employ a unique data set and new time series techniques to reexamine the existence of trends in relative primary commodity prices the data set comprises 25 commodities and provides a new historical perspective spanning the seventeenth to the twenty first centuries new tests for the trend function robust to the order of integration of the series are applied to the data results show that eleven price series present a significant and downward trend over all or some fraction of the sample period in the very long run a secular deteriorating trend is a relevant phenomenon for a significant proportion of primary commodities 2010 the president and fellows of harvard college and the massachusetts institute of technology

concession bargaining the impact on shareholders equity this analysis of bargaining settlements in 1982 83 shows that on average shareholders in those firms that negotiated concessionary settlements enjoyed an 8 to 10 percent increase in the value of their holdings the author interprets this result to mean not that the value of the firm increased but rather that concessions enlarged the shareholders portion of the firm s value at the expense of the workers portion on the other hand concession bargaining does not seem to have reallocated business risk between shareholders and labor finally the evidence suggests that firm specific sources of risk can explain in part not only the magnitude of the concession effects but also the probability that concession bargaining will occur

estimating the market effect of a food scare the case of genetically modified starlink corn abstract in 2000 a genetically modified corn variety called starlink that was not approved for human consumption was discovered in the food corn supply to estimate the price impact of this event on the u s corn market we develop the relative price of a substitute method this method applies not only to the starlink event but also to rare events in other markets we find that the contamination led to a 6 8 discount in corn prices and that the suppression of prices lasted for at least a year

commodity prices and unit root tests price theory suggests that commodity prices should be stationary series yet tests for unit roots rather frequently imply that these prices are not stationary this seeming inconsistency is investigated by applying alternative specifications of unit root tests to prices of corn soybeans barrows and gilts and milk the preponderance of evidence suggests that nominal prices do not have unit roots but the results are sensitive to the specification of the test equation accounting for a structural change that shifts the mean appears to be an important issue in unit root tests

fair trades by trade fairs information providing institutions under monopolistic competition it is a standard result of search theory that the optimal reservation supply price e g wage is negatively correlated to search costs this paper applies the inverse relationship between demand prices and limit prices to the analysis of an hitherto unexplored topic trade fairs trade fairs bloomed during the middle ages and early trade based capitalism and survived for centuries in last decades their growth became sustained they attract every year hundreds of thousands of exhibitors and tens of millions of visitors

structural breaks in international tourism demand are they caused by crises or disasters it is recognised that the tourism industry is vulnerable to some form of crises or disaster however despite the attention given to the nature and consequences of tourism crises and disasters there is a gap in the literature regarding the ex post detection of these events in this article we estimate both the number and date of structural breaks in international tourism arrival series for 25 countries and madeira island using the bai and perron 1998 structural break test we compare the date of tourism crises and disasters to the dating of these structural breaks we observe that tourism crises and disasters are largely consistent with the dates of breaks therefore this method allows us to solve a gap in the tourism industry related to the correct allocation of negative shocks in international tourism arrival demand to crisis or disaster phenomena

market interdependence and volatility transmission among major crops this article provides a comprehensive analysis of the dynamics of volatility across major agricultural commodities in the united states volatility interactions across markets may lower the effectiveness of diversification strategies to mitigate price risks and should be taken into account when analyzing the pricing behavior of different agricultural commodities we follow a multivariate garch approach to evaluate the time evolution of conditional correlations and volatility transmission across corn wheat and soybeans price returns on a daily weekly and monthly basis the period of analysis is from 1998 to 2012 the estimation results indicate a lack of lead lag relationships between corn wheat and soybeans price returns at the mean level we find however important volatility spillovers across commodities particularly at the weekly and monthly level wheat and corn seem to play a major role in terms of volatility transmission despite the supposed higher financial market integration of agricultural commodities we do not observe that agricultural markets have become more interdependent in recent years

networking for competitiveness a policy innovation that has achieved widespread diffusion across national and sub national governments in industrialized countries is the promotion of networks among small manufacturers as a means of promoting competitiveness however research and evaluations of formal networks formed in response to policy initiatives tend not account for the informal networks that small manufacturers routinely use in gathering information and business resources this study examines the use of informal networks by 50 small manufacturing firms in rural and urban regions of northern florida the analysis is inductive and designed to provide a point of comparison to the growing literature on formal small manufacturing networks unlike formal networks the links that comprise informal networks tend to be geographically and socially mixed small firms use informal networks to gather information on a mix of issues urban and rural firms have similar patterns of network use on issues affecting product development and competitiveness but they have different patters of network usage for issues associated with exporting and labor problems informal networks draw upon local and non local information resources that do not require significant amounts of interpersonal contact across actors proximity is not a factor in the effective use of informal networks for information purposes rather the emphasis is upon locating tried and true solutions that solve the business needs there is little evidence suggesting that the informal networks that these small manufacturers use are gravitating towards or seeking the development of formal networks thus policy prescriptions identifying barriers to networking among small manufacturers are borne out in this study

long run and short run co movements in energy prices and the prices of agricultural feedstocks for biofuel recent expansions in biofuel production have led to concerns about an emerging new relationship between energy prices and the prices of agricultural feedstock for biofuel we provide new econometric evidence on this relationship using common trend common cycle decompositions to estimate long run and short run co movement across various energy and agricultural prices we also test for the presence of regime changes that may alter the relationship between energy and agricultural feedstock prices under certain conditions we find that co movements between energy and agricultural feedstock prices tend to dissipate in the long run which has important implications for biofuel and food policy

union relative wage effects a survey of macro estimates this paper surveys union wage effect estimates drawn from empirical cross section wage equations fitted to macro aggregated data in 34 post 1963 studies containing such equations each estimate is the partial derivative of the dependent wage variable in logarithmic units with respect to the extent of unionism fraction unionized variable in the equation this paper shows that these estimates contain a mixture in uncertain ratio of the union nonunion wage differential or wage gap on the one hand and an extent of unionism effect on the other therefore the macro estimates should not be interpreted as wage gap estimates

ppp in the 34 oecd countries evidence from quantile based unit root tests with both smooth and sharp breaks abstractconventional unit root tests have mostly failed to validate the ppp quantile based unit root tests by previous research have provided some support for the ppp in this article we take an additional step and incorporate sharp shifts and smooth breaks into the quantile based unit root test and re examine the ppp in each of the 34 oecd countries over the period 1994 01 2016 03 we find support for the ppp in 18 countries of austria chile estonia finland france germany italy korea mexico netherlands new zealand poland portugal slovenia sweden switzerland turkey and the united kingdom

market competition and strike activity we develop a model of wage bargaining with private information in a duopoly we investigate how product differentiation and market competition bertrand vs cournot competition affect wages and strikes if bargaining takes place at the industry level then both the wage outcome and the strike activity do not depend on the degree of product differentiation whatever the type of market competition however if bargaining takes place at the firm level then wages and strikes are increasing with the degree of product differentiation and the strike activity is smaller under bertrand than under cournot competition

an investigation into the determinants of u s strike activity this paper outlines the steps involved in constructing a new panel dataset of u s contract negotiations and strike activity this data set has a much broader coverage of firms and unions than micro data sets analyzed to date key findings include the discovery that the variability and not the level of firm profitability affects the probability of a strike personal characteristics of the union workforce also emerge as key determinants of strike activity finally strikes are found to be more likely when the local labor market is tight but less likely when the industry labor market is tight copyright 1986 by american economic association

a multistage model of bargaining this paper presents a simple multistage model of bargaining wherein a seller makes an offer that can be either accepted or refused if rejected the process continues how the seller s ability to make commitments affects bargaining outcomes is analysed by comparing the commitment equilibria to those arising when commitment is impossible the effects of increasing uncertainty about preferences and varying the length of the bargaining horizon are analysed the ways in which the bargaining environment can be changed to improve outcomes are discussed

what drives commodity prices this paper examines common forces driving the prices of 51 highly tradable commodities we demonstrate that highly persistent movements of these prices are mostly due to the first common component which is closely related to the us nominal exchange rate in particular our simple factor based model outperforms the random walk model in out of sample forecast for the us exchange rate the second common factor and de factored idiosyncratic components are consistent with stationarity implying short lived deviations from the equilibrium price dynamics in concert these results provide an intriguing resolution to the apparent inconsistency arising from stable markets with nonstationary prices

additional evidence of long run purchasing power parity with restricted structural change we investigate two alternative versions of purchasing power parity ppp reversion to a constant mean in the spirit of cassel and reversion to a constant trend in the spirit of balassa and samuelson using long span real exchange rate data for industrialized countries we develop unit root tests that both account for structural change and maintain a long run mean or trend with conventional tests previous research finds evidence of some variant of ppp for 9 of the 16 countries with the unit root tests in the presence of restricted structural change we find evidence of ppp for five additional countries

revisiting purchasing power parity in oecd this study revisits purchasing power parity theory ppp in the 34 oecd countries during january 1994 august 2013 we use a new panel stationary test with both sharp breaks and smooth shifts a novel approach to panel unit root testing proposed by bahmani oskooee et al 2014 the results indicate that the ppp holds in half of the 34 oecd countries these results indicate the importance of proper modelling of both sharp breaks and smooth shifts in real effective exchange rate series of oecd countries