type="main" xml:lang="en" <title type="main">Abstract</title> <p>Persistent deviations of exchange rates from equilibrium values may lead to inefficient resource allocations internationally. Such persistence is well documented and represents a challenge for policy makers. If the source of the persistent deviations is real...</p>

Using a simple cointegrated vector autoregression (VAR) I find strong evidence for a liquidity effect at policy relevant time horizons with a broad monetary aggregate. The liquidity effect is present for both nominal and real interest rates.

This paper examines the roles played by innovations identified from a simple four-variable VAR characterized by cointegration. Using knowledge of cointegration rank and “textbook” relations that link macroeconomic aggregates, we identify distinct “real” and “nominal” innovations that...

In this paper, the existing Fisher equation research is extended to time series on the Canadian nominal interest rate and inflation to test the validity of the Fisher hypothesis and related hypotheses. The evidence suggests a significant long-run equilibrium between nominal rates and inflation...