In pursuit to sketch the Pakistan USA Exchange Rate patterns for the duration of 1991M3 to\r\n2010M5 using the CHEERS model, the role of Goods Market and Financial Market is\r\nimplied through the Purchasing Power Parity (PPP) and Uncovered Interest Parity (UIP)\r\nrespectively. The results using Vector Error Correction Model (VECM) revealed that both\r\nParities work in combination with near unity elasticities to explain the motion of Exchange\r\nRate in Long Run, but it showed very slow degree of convergence (around 3 and half years)\r\nto this equilibrium path after any shock.
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