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ralph lauren polo

 
Daiki Maki
 
''Asymmetric adjustment of the equilibrium relationship between the nominal interest rate and inflation rate''
( 2005, Vol. 3 No.9 )
 
 
This paper investigates the equilibrium relationship between the nominal interest rate and inflation rate in Japan using a threshold cointegration test, which allows for asymmetric adjustment. While the Engle-Granger method assuming symmetric adjustment cannot obtain the result of cointegration, a threshold cointegration approach provides clear evidence of the cointegration relationship characterized by asymmetric adjustment toward equilibrium. This shows that the long-run equilibrium relationship between the nominal interest rate and inflation rate is stable with asymmetric adjustment.
 
 
Keywords:
JEL: C2 - Single Equation Models; Single Variables: General
E4 - Money and Interest Rates: General
 
Manuscript Received : Feb 23 2005 Manuscript Accepted : Feb 23 2005

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