RDP 9203: Real Exchange Rates and the Globalisation of Financial Markets Charts

Chart 1
Unexplained Real Exchange Rate Movements About Equilibrium: the Cointegrating Residuals
Chart 1 Unexplained Real Exchange Rate Movements About Equilibrium: the Cointegrating Residuals
Chart 2
3-Month Interest Rates Differentials – on-shore deposits minus off-shore deposits
Chart 1 3-Month Interest Rates Differentials – on-shore deposits minus off-shore deposits
Chart 3
Covered Interest Disparities Using Treasury Bill Rates
Chart 3 Covered Interest Disparities Using Treasury Bill Rates
Chart 4
Estimated Savings-Investment Correlations: Pooled Data
Chart 4 Estimated Savings-Investment Correlations: Pooled Data

where I is total non-government investment, Y is GNP/GDP, S is equal to Inline Equation when ST is total savings, SG is government. saving and Inline Equation is an estimated Ricardian effect. Estimating this equation using only cross-section data on the countries in the sample, the United States, Japan, Germany, France, Italy, the United Kingdom, Canada, Australia and Switzerland does not yield a sufficient number of observations to provide reliable estimates of Φ. Thus pooled time-series-cross-section data are employed. A constant inventory of 40 observations (10 countries by 4 quarters) were maintained in the sample with quarter t's estimate of Inline Equation, obtained by adding the quarter' s values of the relevant variables for all the countries and deleting those for quarter t−4. The discontinuous lines represent two standard error estimates for the Inline Equation.