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An Empirical Investigation of the International Fisher Effect: Mexican Peso and United States Dollar

Author

Listed:
  • Hossein Varamini

    (Ph.D., Elizabethtown College, Elizabethtown, PA 17022, USA)

  • Jason Clough

    (Elizabethtown College, Elizabethtown, PA 17022, USA)

  • Madison McCall

    (Elizabethtown College, Elizabethtown, PA 17022, USA)

Abstract

The main purpose of this study is to examine if the International Fisher Effect holds between Mexico and the United States for the period from Q1: 2005 through Q3: 2016. The results of the test indicate a significant relationship between the interest rate differentials and the changes in the currency value between the two countries. The finding of this study is consistent with some of the earlier research while signifying the importance of other variables in improving the explanatory power of the independent variable.

Suggested Citation

  • Hossein Varamini & Jason Clough & Madison McCall, 2017. "An Empirical Investigation of the International Fisher Effect: Mexican Peso and United States Dollar," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 3(7), pages 110-113, 07-2017.
    • Handle: RePEc:arp:ijefrr:2017:p:110-113
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    References listed on IDEAS

    as
    1. Fama, Eugene F, 1975. "Short-Term Interest Rates as Predictors of Inflation," American Economic Review, American Economic Association, vol. 65(3), pages 269-282, June.
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    International fisher effect.;

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