This paper attempts to examine the behaviour of the exchange rate in response to a change in interest rate differential. The empirical results of the study based on mounthly data from Britain, Canada, Germany and Japan provide support for Dornbusch's "overshooting" exchange rate in the...

The effects of monetary policy are transmitted to the economy through changes in money and/or changes in interest rates. Most of the recent studies based on VAR indicate the existence of "monetary puzzles" in their empirical results. A puzzle exists when the effects of monetary policy on...

The purpose of thia paper is to examine the link between real interest rates in a group of OECD countries. The paper will also attempt to investigate the extent to which real interest reates are influenced by the movements of real rates in larger economies.