Interest rate expectations are essential to exchange rate determination. Using a unique survey data set on interest rates forecasts from 1986 to 1995 for G7 countries, we find that there were more persistent interest rate shocks in sample than there were expected by the market.

A line of recent research has uncovered a close connection between sustainability-like measures of dynamic consumption potential and green-NNP-like indices of inclusive current economic activity. In the classical case of a time-autonomous technology with a constant real interest rate, present...

A critical problem, which has long plagued cost-benefit analysis, concerns the appropriate interest rate to use for discounting the future. This paper proposes a new approach to resolving the dilemma of the unknown discount rate, by incorporating the uncertainty directly into the analysis. An...

It is well known that modeling exchange rates is difficult. Meese and Rogoff's (1983) results show that a random walk model performs as well as or better than a variety of structural models, where the forecasts from the structural models are based on the actual values of the future explanatory...

This paper investigates the determinants of real interest rates at world and country level. The starting point is the idea that the real interest rates reflect the interaction of desired saving and planned investment, using the framework developed by Barro and Sala-i- Martin (1990) and Barro (1992).

The aim of this paper is to evaluate the impact of monetary policy in tests of the Expectations Hypothesis of the term structure of interest rates. We apply the model developed by McCallum (1994b), in which the Expectations Hypothesis interacts with a policy reaction function and with a...