Economic Policies and Financial Market Integration: What Can We Learn from Interest Rate Differentials?

CREFE Working Paper 52

Posted: 29 Sep 1997

See all articles by Paul Fenton

Paul Fenton

Government of Canada - International Relations Department

Alain Paquet

University of Quebec at Montreal (UQAM) - Centre de recherche sur l'emploi et les fluctuations économiques (CREFÉ)

Date Written: August 1997

Abstract

This paper reviews the state of theoretical and empirical economic knowledge regarding interest rate differentials (and other deviations from international non arbitrage conditions). It emphasizes in particular what can be learned from these differentials in relation to the conduct of fiscal and monetary policy in the context of small open economies such as Quebec and Canada. The determination of interest rates and their interaction with fiscal and monetary policy are discussed and some important empirical results are surveyed.

JEL Classification: F41, E43, E63, E44, F3, G15

Suggested Citation

Fenton, Paul and Paquet, Alain, Economic Policies and Financial Market Integration: What Can We Learn from Interest Rate Differentials? (August 1997). CREFE Working Paper 52, Available at SSRN: https://ssrn.com/abstract=29180

Paul Fenton (Contact Author)

Government of Canada - International Relations Department ( email )

234 Wellington Street
Ottawa, Ontario K1A 0G9
Canada
514-987-6181 (Phone)
514-987-8494 (Fax)

Alain Paquet

University of Quebec at Montreal (UQAM) - Centre de recherche sur l'emploi et les fluctuations économiques (CREFÉ) ( email )

P.O. Box 8888, Downtown Station
Montreal, Quebec H3C 3P8
Canada
514-987-3000 ext. 8371# (Phone)
514-987-8494 (Fax)

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