Testing For Real Interest Rate Convergence Over The Long-run: Some Further Evidence

This study presents additional evidence on the convergence speeds of real interest rate differentials. Using median unbiased estimation and impulse response analysis, since reporting only point estimates provides an which deviations from real interest party (RIP) die out. Moreover, since reporting only point estimates provides an incomplete picture of the speed of convergence toward RIP, median unbiased confidence intervals are also computed, this implies that the domestic authorities still have some scope to alter real economic activity through the real interest rate channel.