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Byline: Lawrence G. Goldberg (1), James R. Lothian (2), John Okunev (3) Keywords: financial integration; interest-rate equalization; real interest rates Abstract: This paper compares the behavior of real interest rate differentials across the major countries under the Bretton Woods regime and the regime of floating exchanges that replaced it. The primary object is to investigate both the extent of market integration and its changes over time. For all fifteen possible country pairs real interest differentials are mean reverting, and in two-thirds of these cases indistinguishable from zero statistically. For all country pairs on average and for most such pairs individually, moreover, the estimated differentials are not appreciably different in absolute value than the differentials that we estimate for various money-market rates within the United States. Additional evidence points to a narrowing of differentials under floating rates over time and an increase in speeds of convergence. Author Affiliation: (1) Department of Finance University of Miami, Coral Gables, FL (2) School of Business, Fordham University, 113 West 60th Street, New York, NY, 10023 (3) Principal Global Investors, New York, NY Article History: Registration Date: 07/10/2004