Finding International Fisher effect to determine the exchange rate through the purchasing power parity theory: the case of Mexico during the period 1996-2012

Andrea Salas Ortiz ^[2] ; Rodrigo Gómez Monge ^[1]
1. [1] Universidad Michoacana de San Nicolás de Hidalgo
  
  Universidad Michoacana de San Nicolás de Hidalgo
  
  México
2. [2] University of New York
Localización: Applied econometrics and international development, ISSN 1578-4487, Vol. 15, Nº. 1, 2015, págs. 97-110
Idioma: inglés
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Resumen
- Nowadays, the exchange rate is one of the most relevant issues of modern macroeconomics. Its importance is essential because of its impact on nominal and real variables. Our central question is whether the nominal interest differentials might be used to anticipate currency changes specially the Mexican-US exchange rate. So the purpose of this paper is to describe the theory of the international fisher effect and test its empirical validity for the Mexican case.