In order to investigate and verify the long-term relationships between economic growth and exchange rate in APEC, we applied the bound-testing approach referred to by Pesaran, Shin and Smith (2001). By means of the unrestricted-error-correction model, we observed and compared whether different stages of economic development obtained different empirical results. We have employed the relative level for the per capita GDP and the relative growth rate of the per capita GDP as the proxies for the economic growth. However, according to our empirical results, the applicability of the B-S hypothesis to the APEC economies attains different empirical results even in the similar stages of development.
