IMF Working Paper Series
Выпуск N99/141 за 1999 год
Опубликовано на портале: 10-12-2003Francisko Nadal-De Simon, W.A Razzak IMF Working Paper Series. 1999. No. 99/141.
This paper reexamines some unsettled theoretical and empirical issues regarding the relationship between nominal exchange rates and interest rate differentials and provides a model for the behavior of exchange rates in the long run, where interest rates are determined in the bond market. The model predicts that an increase in the interest rate differential appreciates the home currency. We test the model for the U.S. dollar against the Deutsche mark, the British pound, the Japanese yen, and the Canadian dollar. The first two pairs of exchange rates—for which purchasing power parity