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.
Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:his-83 |
Date | January 2007 |
Creators | Wang, Zhiyuan |
Publisher | Högskolan i Skövde, Institutionen för teknik och samhälle, Skövde : Institutionen för teknik och samhälle |
Source Sets | DiVA Archive at Upsalla University |
Language | English |
Detected Language | English |
Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
Format | application/pdf |
Rights | info:eu-repo/semantics/openAccess |
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