An Empiric Analysis of the Relationship between Nonlinear Real Exchange Rate and Real Interest Differentials for RMB
This paper introduces threshold nonlinearity into RMB to investigate the relationship between real exchange rate and real interest differentials.With Obstfeld and Rogoff model and BTAR model,the link between real exchange rate and real interest differentials can be found in the data of our country when nonlinearity in the real exchange is taken into consideration.