Bjørnland, Hilde Christiane; Hungnes, Håvard - Statistisk Sentralbyrå, Government of Norway - 2002
Modelling the Norwegian exchange rate against a basket of currencies, we find a robust long-term link between the real exchange rate and real interest differential that is consistent with purchasing power parity (PPP) and uncovered interest parity (UIP). However, PPP alone is rejected. These...