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UIP |
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These studies then go on to estimate and test for the simultaneous existence of uncovered interest parity (UIP), which is also called the open-economy Fisher relation, and ex ante PPP (EAPPP), the other conditions sufficient for RIP. Section 3 describes a method for calculating franc-dollar realignment expectations, using the theory of uncovered interest parity, for the period spanning the United States' and France's simultaneous adherence to the gold standard in the interwar period, 1926:12 to 1933:02. Equation 5 is the uncovered interest parity condition with a stochastic disturbance term and can be rewritten as |
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