Open Access. Powered by Scholars. Published by Universities.®

Business Commons

Open Access. Powered by Scholars. Published by Universities.®

Eastern Illinois University

2018 Awards for Excellence in Student Research and Creative Activity – Documents

Finance

Articles 1 - 1 of 1

Full-Text Articles in Business

The Impact Of Real Interest Rate On Real Exchange Rate: Empirical Evidence From Japan, Tomiwa Shodipe Apr 2018

The Impact Of Real Interest Rate On Real Exchange Rate: Empirical Evidence From Japan, Tomiwa Shodipe

2018 Awards for Excellence in Student Research and Creative Activity – Documents

Abstract

This paper examines the impact of real interest rate on the real exchange rate in Japan using Two Stage Least Square econometric techniques. The two instruments used are money supply and gross domestic product growth rates. The result provides support for the theoretical and empirical evidences of positive relationship between real interest rate and real exchange rate in Japan. The estimation also shows that there is positive relation between trade and Japanese Yen over the period considered in the study. In light of these findings, the study suggests the adoption of fiscal macroeconomic policy instruments that are capable of …