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Real interest rate parity: Decomposition of financial and comercial components in the case of Colombia

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  • Sergio Clavijo

    (Minister of Finance of Colombia)

Abstract

The concept of interest rate parity is here revisited, emphasizing the different results that are obtained when the analysis is made either using a nominal interest rate difference, adjusted by the actual or expected rate of depreciation, or using a real interest rate difference. The results vary according to deviations from purchasing power parity .

Suggested Citation

  • Sergio Clavijo, 1996. "Real interest rate parity: Decomposition of financial and comercial components in the case of Colombia," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 11(1), pages 117-140.
    • Handle: RePEc:emx:esteco:v:11:y:1996:i:1:p:117-140
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    File URL: https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/259/261
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    References listed on IDEAS

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    1. Calvo, Guillermo A. & Reinhart, Carmen M. & Vegh, Carlos A., 1995. "Targeting the real exchange rate: theory and evidence," Journal of Development Economics, Elsevier, vol. 47(1), pages 97-133, June.
    2. Juan José Echavarría & Alejandro Gaviria Uribe, 1992. "Los determinantes de la tasa de cambio y la coyuntura actual en Colombia," Coyuntura Económica, Fedesarrollo, vol. 22(4), pages 101-112, December.
    3. Frankel, Jeffrey A. & MacArthur, Alan T., 1988. "Political vs. currency premia in international real interest differentials : A study of forward rates for 24 countries," European Economic Review, Elsevier, vol. 32(5), pages 1083-1114, June.
    4. Branson, W. H., 1988. "Political vs. currency premia in international real interest rate differentials : Jeffrey A. Frankel and Alan T. MacArthur," European Economic Review, Elsevier, vol. 32(5), pages 1119-1121, June.
    5. Calvo, Guillermo A. & Reinhart, Carmen M. & Vegh, Carlos A., 1995. "Targeting the real exchange rate: theory and evidence," Journal of Development Economics, Elsevier, vol. 47(1), pages 97-133, June.
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