EconPapers    
Economics at your fingertips  
 

The Relationship Between Inflation Rate and Nominal Interest Rate in Bolivarian Republic Of Venezuela: Revisiting Fisher’s Hypothesis

Mustafa Kasim () and Bentouir Naima
Additional contact information
Bentouir Naima: Ain Temouchent University, Algeria

Journal of Applied Management and Investments, 2018, vol. 7, issue 4, 214-224

Abstract: Stability of economics over the world represented by understanding the relationship among the interest rate and inflation rate. This paper investigates the relationship between inflation rate and nominal interest rate based on Fisher equation, using a monthly frequency data in case of Venezuela between 1/1/1990 to 31/12/2016. The Dickey Fuller (ADF) test and Phillips-Perron (PP) test both have empirically used to check the unit root. Also, Johansen for Co-integration test is exploited to study the equilibrium relation for long run between the inflation rate and the nominal interest rate in the time series data. The result shows that both variables are non-stationary at Level I (0) in both tests (ADF and PP), after converting the variables to first difference I (1) with taking the log both of interest rate and inflation rate become stationary. The Johansen co-integration null hypothesis is failed to be rejected in both tests Trace-statistics test and Max-Eigen statistics. This means that the long-run equilibrium relation between the inflation rate and nominal interest rate in Venezuela during 1990 to 2016 is not existed, i.e. the Fisher hypothesis does not hold through the sub-period in Venezuela.

Keywords: bankruptcy; business; ethics; manager; appropriation economics; social inequalities (search for similar items in EconPapers)
JEL-codes: E31 E43 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.jami.org.ua/Papers/JAMI_7_4_2018_214-224.pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ods:journl:v:7:y:2018:i:4:p:214-224

Access Statistics for this article

Journal of Applied Management and Investments is currently edited by Anatoliy G. Goncharuk

More articles in Journal of Applied Management and Investments from Department of Business Administration and Corporate Security, International Humanitarian University Contact information at EDIRC.
Bibliographic data for series maintained by Anatoliy G. Goncharuk ().

 
Page updated 2019-03-31
Handle: RePEc:ods:journl:v:7:y:2018:i:4:p:214-224