Nominal Exchange Rates and Nominal Interest Rate Differentials /

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 p...

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Bibliographic Details
Main Author: Nadal De Simone, Francisco
Other Authors: Razzak, Weshah
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 1999.
Series:IMF Working Papers; Working Paper ; No. 1999/141
Online Access:Full text available on IMF
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245 1 0 |a Nominal Exchange Rates and Nominal Interest Rate Differentials /  |c Francisco Nadal De Simone, Weshah Razzak. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 1999. 
300 |a 1 online resource (41 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a 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 seems to hold-display a strong relationship with interest rate differentials. 
538 |a Mode of access: Internet 
700 1 |a Razzak, Weshah. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 1999/141 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/1999/141/001.1999.issue-141-en.xml  |z IMF e-Library