This paper proposes a different empirical approach to estimate the UIP by analyzing a large number of cross-country bilateral exchange rates using cross-section analysis. Different from conventional time-series UIP, cross-sectional UIP is examined with single equation estimation and panel...

This paper estimates UIP slope parameters using a large number of cross-country bilateral exchange rates from a broad spectrum of developed and developing countries. Empirical evidence shows that short-term (one month) UIP holds well, and the failure of UIP is largely due to the key currency...