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How rates depends on maturity
Rates depending on maturity. Even though rates with different maturity (all recalculated to a yearly rate) need not be exactly equal, they cannot be too different either. This is particularly true for rates with similar maturity. The seven month rate cannot deviate far from the six month rate since they are fairly close substitutes.
Real Exchange Rates (EXCH) is the next variable that will be analysed in this VAR. The reason for including exchange rates in the VAR is that they are an important channel through
Positive and normative economics -introductiion Economic theory or analysis evolves from basic propositions about how individual human beings (or individual economic units) beh
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