Article ID Journal Published Year Pages File Type
964425 Journal of International Money and Finance 2006 15 Pages PDF
Abstract

This paper examines several new empirical findings in the study of uncovered interest parity. It reviews recent developments in the study of long-horizon interest parity regressions, the implications of relaxing the rational expectations methodology and the characteristics of results pertaining to the non-G7 currencies, including those in less developed economies. In brief, the evidence against uncovered interest parity in the current floating rate era is not as great as is commonly thought, although it is still true that for the major currencies, the short-term interest differential remains a biased predictor of ex post changes in the exchange rate.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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