International Parity Conditions Essay -- essays research papers fc

Prices, Interest Rates, and Exchange Rates in balance (International Parity Conditions)Table of ContentExecutive Summary31. submission.42.Literature Review63.Findings and Analysis 10a.PPP..10b.FE....12c.IFE...144.Conclusion & Recommendations ...16Bibliography.17Appendix A. Historical Data18Table of rangesFigure 1. International Parity ConditionsFigure 2. fool draw for PPP Figure 3. Time-series entropy for inflation paces differential and swap target change Figure 4. Regression Plot for PPP Figure 5. Scatter Diagram for FE Figure 6. Time-series data for inflation and wager place differentials Figure 7. Regression Plot for FE Figure 8. Scatter Diagram for IFE Figure 9. Time-series data for interest rates differentials and exchange rate changeFigure 10. Regression Plot for IFEExecutive SummaryThis appellation is aimed at examining the evidence for three of the alliances that underpin (explicitly or implicitly) much of internationalistic macroeconomics. The first is purchasin g power parity (PPP), or the hypothesis that on that point exists a constant long-run equilibrium real exchange rate. The insurgent is Fisher Effect, which tests the relationship between difference in inflation rates and difference in nominal interest rates. The third establishes a relationship between real exchange rates and real interest rate differentials or International Fisher Effect. The tests are conducted on a introduction of two economies United States and Kazakhstan. The results are obtained using graphs and regression models, which significantly step-up the power of the tests. The empirical evidence is evaluated on the basis of historical data for the period of 1999-2003. The paper is divided into two main graphic symbols. The first part contains analysis of the historical data about interest rates, exchange rates, and 3-month T-bills (Kazakhstani strike MEKKAM) in two countries Kazakhstan and USA. The second part gives implications based on the res... ...ptember14 86.362.320.930.1218-3.98-5.07October147.826.3 2.040.940.5647-4.26 November146.996.4 1.770.911.5826-4.63 December144.76.4 1.880.93 -4.52