Turn on more accessible mode
Skip to main content
Turn off more accessible mode
PPG Portal Supplementary Resources
Sign In
|
Theory of Interest Rate Parity
All Sites
People
Advanced Search
PPG Portal Supplementary Resources
Supplementary Resources Home
PPG Portal (The Atlas of Public Management)
PPG Glossary
Other Glossaries
Masters Programs
Institutes & Journals
Blogs & Media
PPG Portal Supplementary Resources
>
PPG Glossary
>
T
>
Theory of Interest Rate Parity
>
Pages
>
default.aspx
Home
Quick Launch
View All Site Content
PPG Glossary Home
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P, Q
R
S
T
U, V
W, X
Y, Z
Other Glossaries
PPG Portal Supplementary Resources
>
PPG Glossary
>
T
>
Theory of Interest Rate Parity
Theory of Interest Rate Parity
A theory of interest rate determination which holds that the real interest rate on comparable financial assets should be the same in all countries with full access to world financial markets.
(Dungan, Peter. Class Lecture.
PPG 1002H Microeconomics for Policy Analysis, University of Toronto School of Public Policy and Governance)
---------------------------------
In the real world, there does not exist perfect interest rate parity throughout the world. This is largely due to different levels of default risk that exist in different countries and the different tax laws and regulations which exist in different nations.
Approved for glossaryposting by Ben Eisen on January 28, 2011