1 Long-Run Purchasing Power Parity in Eastern and Southern African Countries: Evidence from panel data stationary tests with multiple structural breaks Jean-François HOARAU 1 (CERESUR, University of La Reunion, FRANCE) Abstract. The panel data stationary test with multiple structural breaks developed by Carrion-i-Silvestre, Del Barrio-Castro and Lopez-Bazo (Econometrics Journal, 2005) is used to study the Purchasing Power Parity in a set of 17 Eastern and Southern African economies for the period 1970-2007. This latter is considered both in its traditional view, i.e. the reversion of the real exchange rate to a constant mean, and in the Balassa-Samelson view, i.e. the reversion of the real exchange rate to a constant trend. The results indicate that taking into account the presence of structural breaks changes dramatically the conclusion about long-run Purchasing Power Parity. Indeed, in contrast with standard stationary tests, our study shows that Purchasing Power Parity holds in the long-run for our panel when the Balassa-Samuelson version is considered. Keywords: Panel data, PPP, real exchange rate, structural breaks, Africa JEL classification: C23, F31 1 Corresponding author: Faculty of Law and Economics, University of La Reunion, 15 Avenue René Cassin 97715 Saint-Denis Messag Cedex 9, La Reunion, FRANCE; fax: +262 262 93 84 72; E-mail: jfhoarau@univ- reunion.fr .