Real Interest Rate and Exchange Rate Divergences within the EZ12: Evidence Based at Mean Group Estimators
Since nominal interest rate and nominal exchange rate are common for the Euro-zone (EZ) members, inflation differentials initiate real interest rate and real exchange rate divergences with further spill-over effects. The aim of the research is to investigate in which extent national price level, re...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Universidad de Huelva
2021-08-01
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| Series: | Revista de Economía Mundial |
| Subjects: | |
| Online Access: | https://www.uhu.es/publicaciones/ojs/index.php/REM/article/view/4920 |
| Summary: | Since nominal interest rate and nominal exchange rate are common for the Euro-zone (EZ) members, inflation differentials initiate real interest rate and real exchange rate divergences with further spill-over effects. The aim of the research is to investigate in which extent national price level, real interest rate and real exchange rate, co-move or diverge from supranational EZ variables. The research results, based on heterogeneous dynamic macro-panel data of 12 initial EZ members in the period 1999Q1-2019Q4, confirm heterogeneous adjustment, as well as the lack of balancing towards equilibrium, as a sign of EZ vulnerability.
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| ISSN: | 1576-0162 2340-4264 |