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Study the relationship between real exchange rate and interest rate differential – United States and Sweden

This paper uses co-integration method and error-correction model to re-examine the relationship between real exchange rate and expected interest rate differentials, including cumulated current account balance, over floating exchange rate periods. As indicated by the dynamic model, I find that there is a long run relationship among the variables using Johansen co-integration method. Final conclusion is that the empirical evidence is provided to show that our error-correction model leads to a good real exchange rate forecast.

Identiferoai:union.ndltd.org:UPSALLA1/oai:DiVA.org:his-83
Date January 2007
CreatorsWang, Zhiyuan
PublisherHögskolan i Skövde, Institutionen för teknik och samhälle, Skövde : Institutionen för teknik och samhälle
Source SetsDiVA Archive at Upsalla University
LanguageEnglish
Detected LanguageEnglish
TypeStudent thesis, info:eu-repo/semantics/bachelorThesis, text
Formatapplication/pdf
Rightsinfo:eu-repo/semantics/openAccess

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