The Behavior of Interest Rate Differentials Under Shifting Exchange Rate Regimes: The Experience of Chile, Colombia and Israel *. The Behavior of Interest Rate Differentials Under Shifting Exchange Rate Regimes: The Experience of Chile, Colombia and Israel *.

The Behavior of Interest Rate Differentials Under Shifting Exchange Rate Regimes: The Experience of Chile, Colombia and Israel *‪.‬

Cuadernos de Economia: Latin American journal of economics 2005, May, 42, 125

Cuadernos de Economia: Latin American journal of economics
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Publisher Description

This paper studies the dynamics of the interest rate differential across band and floating exchange rate regimes in Chile, Colombia and Israel, and in a benchmark group composed of Italy, Portugal and Spain. Significant differences in the interest rate-exchange rate link are found between the two groups, irrespective of regime. However, in all countries, except Italy, the interest differential ceased to behave anti-cyclically against output after the adoption of floating, possibly because of a perceived need to gain credibility for the new system in the context of an ongoing disinflation process. JEL: E43, E52, F31.

GENRE
Business & Personal Finance
RELEASED
2005
1 May
LANGUAGE
EN
English
LENGTH
52
Pages
PUBLISHER
Pontificia Universidad Catolica de Chile, Instituto de Economia
SIZE
382
KB

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