38
Table 8. Real Interest Rates And Real Interest Differentials: Cross-Section Evidence
A. Real interest rate
|
(1) |
(2) |
(3) |
(4 | |
|
RINT 1990-98 |
RINT 1990-98 |
RINT 1990-98 |
RINT 1990-98 | |
|
_ NFAZexports |
-0.88 |
-0.88 |
-1.2 |
-ΓT18 |
|
(2.6)* |
(2.68)* |
(5.39)** |
(5.28)** | |
|
Public debt |
1.57 |
1.31 | ||
|
(1.55) |
(1.67) | |||
|
D(RER) |
-0.19 |
-0.19 | ||
|
(0.9) |
(1.1) | |||
|
Adjusted R2 |
0.31 |
0.35 |
0.49 |
0.52 |
|
Countries |
21_____________ |
21_____________ |
21_____________ |
21_______________ |
B. Real interest differential
|
(1) |
(2) |
(3) |
(4) | |
|
RDIF 1990-98 |
RDIF 1990-98 |
RDIF 1990-98 |
RDIF 1990-98 | |
|
_ NFAZexports |
-1.07 |
-1.07 |
-127 |
-126 |
|
(3.62)** |
(4.12)** |
(6.61)** |
(8.21)** | |
|
Public debt |
1.72 |
1.33 | ||
|
(1.8) |
(1.7) | |||
|
D(RER) |
-0.08 |
-0.1 | ||
|
(.43) |
(.72) | |||
|
Adjusted R2 |
0.54 |
0.59 |
0.65 |
0.68 |
|
Countries______ |
20____________ |
20____________ |
20____________ |
20_____________ |
* Sample is Industrial Countries, with exception of Iceland. 1990-98 averaged data. In panel A,
dependent variable is the real interest rate; in panel B, dependent variable is real interest
differential vis-à-vis the US. In regressions (1)-(2), CUMCA is employed as measure of NFA; in
regressions (3)-(4) it is based on fitted value from regression of NFA on GDP per capita, public
debt and demographic variables. In regressions (2) and (4), multivariate real exchange rate is
employed in panel A and bivariate real exchange rate vis-à-vis the US in panel B. * (**) indicates
statistical significance at the 5% (1%) confidence level.