Uncovered interest rate parity calculation
and states that some form of interest rate parity (covered and/or uncovered) should hold for example, Cumby and Obstfeld (1980) and Lizondo (1983a)). Although support for uncovered interest rate parity (UIP, hereafter) has been There are competing explanations for the failure of short-run UIP (for example, Our discussion of uncovered interest rate parity condition in the foreign To consider a hypothetical example of where an arbitrage opportunity would exist,