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Real Interest Rate Linkages and Capital Market Integration: Evidence from the Americas

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In this paper, we study the long-run co-movement among the real interest rates of the U.S., Canada, and a select group of Latin American countries to assess the extent of financial market integration among these countries during a period of high capital mobility. The findings of the study support a long-run relationship between the short-term U.S. real interest rate and those of Canada and the Latin American countries except Mexico.

Abstract

Ⅰ. Introduction

Ⅱ. Brief Literature Review

Ⅲ. Theoretical Issues and Empirical Model

Ⅳ. Empirical Results and Discussion

Ⅴ. Summary and Conclusions

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