Singapore's Interest Rates Linked to Inflation, Unveiling Market Price Puzzle
The study looked at how interest rates and inflation are related in Singapore from 1976 to 2006. They found that as inflation goes up, interest rates also tend to go up, but not by the same amount. This means there is a connection between the two, but not a perfect one. They also found that changes in inflation and interest rates can affect each other in the short term, and that there is a Price Puzzle in the Singapore market.