CES VŠEM o aktuálních ekonomických problémech

goes into a distinct direction and is not ambiguous. In our sample
there are four significant relationships: transition (growth and
inflation); volatility (inflation and transition). They are significant
at the level. Therefore, in these cases the direction is not
clear the direction of influences as less regulation influences
positively both economic growth and inflation. Lower volatility is
associated with lower regulation.
3.4 What conclusion can be drawn – is the 'PPP puzzle' still
alive?
As we have seen, the results are rather ambiguous and do not
provide clear guidance regarding the PPP hypothesis for NMS
countries. What are the possible reasons for these findings? Wu
al. (2010) and Alba and Papell (2007) summarize the recent
studies and highlight that there may be some country
characteristics that determine whether the PPP holds or not.
These are the inflation rate, openness, volatility of exchange rate,
economic growth and distance. However, empirical studies have
not confirmed any of these determinants beyond all doubts. The
results in this study are not crystal clear, either. Possible
problems and/or reasons for the lack of clear-cut evidence in the
analysis of the PPP can be divided into three groups.
The first group includes problems and issues related to available
data. For example, some of them can be labelled as problems of
transition countries. Our time span starts in mid-1990s, which
gives us enough observations in the time dimension, but may
also be teh reason why results are rather mixed due to the
changes of exchange rate regimes in some countries. In a similar
vein, the measures of inflation may have been exposed to similar
kind of shocks. Therefore, the problem may be associated with
price indices and not with exchange rates.
Another problem is well known in the literature – aggregation
bias. It can be associated either with the data used (Broda and
Weinstein, 2008) or linked to empirical methods (Imbs al., 2005)
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