IDEAS home Printed from https://ideas.repec.org/a/fan/steste/vhtml10.3280-ste2000-071004.html
   My bibliography  Save this article

What Explains Real Interest Rate Differentials across European Countries?

Author

Listed:
  • Michele Limosani

Abstract

What Explains Real Interest Rate Differentials across European Countries? (by Michele Limosani) - ABSTRACT: We decompose European real interest rate differentials into three components, the covered interest parity condition, the risk premium and the ex-ante relative purchasing power parity condition, and analyse why real interest rates in Europe do not converge to a single rate. The empirical evidence suggests that the risk premium is the most important factor accounting for deviations from the real interest parity condition and that deviations from the purchasing power parity condition play only a marginal role. JEL Classification: E58

Suggested Citation

  • Michele Limosani, 2000. "What Explains Real Interest Rate Differentials across European Countries?," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2000(71).
    • Handle: RePEc:fan:steste:v:html10.3280/ste2000-071004
    as

    Download full text from publisher

    File URL: http://www.francoangeli.it/riviste/Scheda_Rivista.aspx?IDArticolo=15152&Tipo=ArticoloPDF
    Download Restriction: Single articles can be downloaded buying download credits, for info: https://www.francoangeli.it/DownloadCredit
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kant, Chander, 2005. "Capital mobility among advanced countries," Journal of Policy Modeling, Elsevier, vol. 27(9), pages 1067-1081, December.
    2. Thomas J. Flavin & Michele G. Limosani, 2000. "Explaining European Short-term Interest Rate Differentials: An Application of Tobin's Portfolio Theory," Economics Department Working Paper Series n1000500, Department of Economics, National University of Ireland - Maynooth.
    3. Flavin, Thomas J. & Limosani, Michele G., 2007. "Fiscal, monetary policy and the conditional risk premium in short-term interest rate differentials: an application of Tobin's portfolio theory," International Review of Economics & Finance, Elsevier, vol. 16(1), pages 101-112.

    More about this item

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fan:steste:v:html10.3280/ste2000-071004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stefania Rosato (email available below). General contact details of provider: http://www.francoangeli.it/riviste/sommario.aspx?IDRivista=59 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.