| Abstract: | Conclusions In this paper, we have found strong evidence for a long-run unit proportional relationship between nominal interest rates
and anticipated inflation for three high inflation economies (Argentina, Brazil and Mexico). These results contrast with the
mixed evidence found for low inflation economies. We also found that for those three countries, as well as for the United
States and Australia, the speed of adjustment of interest rates to inflationary shocks does not appear to depend directly
on the absolute level of the inflation rate or any measure of inflation rate volatility. |
