scholarly journals Testing Interest Rate Parity and Rational Expectations for Canada and the United States

1987 ◽  
Vol 20 (2) ◽  
pp. 289 ◽  
Author(s):  
Allan W. Gregory
Keyword(s):  
United States ◽  
Interest Rate ◽  
Rational Expectations ◽  
The United States ◽  
Interest Rate Parity ◽  
Rate Parity

scholarly journals Uncovered Interest Rate Parity and Investment: A Tripartite Analysis of Nigeria, United States of America and China

2020 ◽  
Vol 11 (2) ◽  
pp. 111
Author(s):  
Peter Ubi ◽  
Ishaku Rimamtanung Nyiputen
Keyword(s):  
United States ◽  
Interest Rate ◽  
United States Of America ◽  
Time Series Data ◽  
Series Data ◽  
Interest Rate Parity ◽  
Uncovered Interest Rate Parity ◽  
Long Run ◽  
Rate Parity ◽  
The Impact

This study comparatively examined the validity of the theory of uncovered interest rate parity (UIP) for Nigeria and United States of America (USA) and for Nigeria and China, using USA and China as anchor countries respectively. The study also examined the impact of the theory (UIP) on investment in Nigeria. Using annual time series data spanning from 1980-2017, the pre-estimation test (Augmented Dickey-Fuller Unit root test) was conducted. Given that the variables were integrated of order one and order zero, Autoregressive Distributed lag bound testing approach (ARDL) and Toda- Yamamoto causality test were employed for analysis. The ARDL result indicates that there is no long run relationship between Nigeria and USA but there is a long run relationship between Nigeria and China. By implication, the theory of UIP does not hold between Nigeria and USA but between Nigeria and China, the theory of UIP holds. Also, the result of Toda-Yamamoto indicates that the theory of UIP positively and significantly impacts on investment in Nigeria. The study recommended that the government should strengthen her economic relationship especially with China so as to encourage more investments by China in Nigeria.

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