Question
The empirical evidence suggests that Uncovered Interest Rate Parity is rejected. Following Fama (1984), explain whether UIP deviations can be decomposed in terms of both
The empirical evidence suggests that Uncovered Interest Rate Parity is rejected. Following Fama (1984), explain whether UIP deviations can be decomposed in terms of both rational expectation errors and risk premium.And, what drives such deviations?
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Macroeconomics
Authors: Charles I. Jones
3rd edition
978-0393123944, 393123944, 393923908, 978-0393923902
