Integration prospects of Central and East European countries from the purchasing power parity perspectiveBoršič, Darja (Avtor) Bekő, Jani (Avtor) Baharumshah, Ahmad Zubaidi (Avtor) After presenting the macroeconomic conditions in the group of 13 Central and East European countries and consequently their integration progress thus far, we proceed with testing of the purchasing power parity theory. By covering the period from January 1992 to December 2006, the standard unit root tests, SURADF methodology and time series cointegration analysis are employed on USD and European exchange rate series. The standard unit root tests applied fail to prove stationarity of the real exchange rate series. Although cointegration was found among nominal exchange rates and selected consumer price indices, the theory of purchasing power parity could not be confirmed for any of the advanced transition countries. Because the results from SURADF estimations support the theory in some countries of our sample clearly more research is required on factors that explain the behaviour of prices and exchange rates in the observed economies.20082012-05-28 08:56:14Neznano23487UDK: 336.74COBISS_ID: 9645852NUK URN: URN:SI:UM:DK:VJ1VJS1Esl