In this paper, the purchasing power parity, uncovered interest rate parity and random walk component are nested in a single equation and tested for Pakistan. The autoregressive distributed lag framework is used to recover the underlying parameters of exchange rate expectations formation. The...

Using an autoregressive distributed lag (ARDL) approach, this paper empirically analyses whether the response of inflation to its determinants differs at short and long horizons. The results from the bounds test provide evidence of the existence of a significant long-run relationship between...