This paper investigates the long run relationship of real interest rates within a number of economic blocs such as Asia-Pacific, Europe, North America using cointegration analysis and vector error correction models

This paper characterises the world real interest rate as a common trend in real interest rates in Germany, Japan, and the United States even if there is scepticism in the existence of the world real interest. In theoretical terms, real interest parity is based on the presumed validity of...