Inflation uncertainty and interest rates: is the Fisher relation universal?

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2007

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Routledge Journals, Taylor & Francis Ltd

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Tourism Management
The aim of Atılım University Department of Tourism Management is to train tourism managers who are able to compete at an international level by offering quality education opportunities. Graduates employed as managers in the fields of accommodation, travel, catering, gastronomy, transportation, congress, conference organization begin their professional life while they are still interns. The academic staff consists of faculty members who are experts in their field, as well as sector professionals. With five years of education including the preparatory English courses offered, the courses of the department are in English. The course program consists of applied and theoretical courses devised with respect to the global trends in tourism. Students perform their internship studies at hotel chains, A-Class travel agencies and professional tourism companies. Our Department is in contract with universities abroad within the scope of the Erasmus student Exchange program. With its quality of education documented by TURAK (Tourism Education, Evaluation and Accreditation Board), Atılım university Department of Tourism Management is the first undergraduate program in Turkey to hold the accreditation.

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Abstract

This paper tests the validity of the Fisher hypothesis, which establishes a positive relation between interest rates and expected inflation, for the G7 countries and 45 developing economies. For this purpose, we estimate a version of the GARCH specification of the hypothesis for all countries included in the sample. We also test the augmented Fisher relation by including the inflation uncertainty in the equation. The simple Fisher relation holds in all G7 countries but in only 23 developing countries. There is a positive and statistically significant relationship between interest rates and inflation uncertainty for six of the G7 and 18 of the developing countries and this relationship is negative for seven developing countries.

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24

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Volume

39

Issue

1

Start Page

53

End Page

68

URI

https://doi.org/10.1080/00036840500427908
 https://hdl.handle.net/20.500.14411/926

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