Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211519 
Authors: 
Year of Publication: 
1988
Series/Report no.: 
Bank of Finland Discussion Papers No. 16/1988
Publisher: 
Bank of Finland, Helsinki
Abstract: 
This paper examines the determination of interest rates in small open economies. We use the classical interest rate parity relationships as a starting point in developing a test procedure which allows us to evaluate the importance of various domestic shocks (in particular, monetary and fiscal shocks). This, in turn, gives us some estimates of the degree of monetary autonomy in the respective countries. The empirical analysis covers seven smal' European countries; the sample period is 1980Ml - 1981M12. The general result of this study is that the uncovered interest parity relationship is not sufficient to explain the movement in domestic interest rates, particularly in short-term rates.
Persistent Identifier of the first edition: 
ISBN: 
951-686-161-X
Document Type: 
Working Paper

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