In this paper we analyze the adjustment dynamics of the euro-dollar real exchange rate towards one of the most relevant fundamentals: relative productivity. Using testing and estimation non-linear procedures for ESTAR models for the period 1970-2002, we find that the speed of real exchange rate...

In this paper we test for real interest parity (RIRP) among the 19 major OECD countries over the period 1978:Q1-2006:Q1 using both short- and long-run definitions of interest rates. Once the independence hypothesis is rejected among these series, we test for RIRP using panel data unit root and...