Four Way Equivalence

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July 28, 2017 at 10:56 am #399137
mjibola
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Hello John,

Gone through all of your lectures and I’m not sure you mentioned anything such as the four way equivalence model..

I recently saw this in one of the past papers and I’m not sure what it means? Brief explanation will help.
July 28, 2017 at 6:36 pm #399198
John Moffat
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It is simply the idea that in theory interest rates and inflation rates are linked – the Fisher formula; the exchange rate changes due to inflation rates, and therefore – in theory – the exchange rate changes also with interest rates,
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