Darvas, Zsolt; Rappai, Gábor; Schepp, Zoltán - Money Macro and Finance Research Group - 2007
Results and models of this paper are based on a strikingly new empirical observation: long maturity forward rates between bilateral currency pairs of the US, Germany, UK, and Switzerland are stationary. Based on this result, we suggest a new explanation for the UIP-puzzle maintaining rational...
