This paper applies a recently developed method (Inoue and Rossi, 2021) to estimate functional inflation expectations and ex-ante real interest rate shocks, and then examines their macroeconomic effects in the context of a Functional Vector Autoregressive model with exogenous variables...

The primary reason of this study is to test real interest rate and its impact on investment to the extent of Pakistan span from 1964 to 2012. To test the long-term nexus among level of income, interest rate and investment mainly Johansen Cointegration test is employed. The hypothesis of this...