We offer new insights on the dynamics of the exchange rate-interest rate differential for the case of G7 economies. We show that the nexus is better considered using an asymmetric model, as suggested by a host of previous studies. In addition, we find the role of accounting for structural breaks to be prominent. We also show differences in the nexus between euro and non-euro G7 countries, sugge…
Abstract: National inflation is influenced by regional inflation of selected cities in Indonesia. It implies that the success of policy to control national inflation depends on the success of controlling regional inflation in Indonesia. Furthermore, the sources of inflation may not only come from demand side but also from supply side. Thus, policy to control inflation requires cooperation betwe…