My question is one which model I should use to examine the relationship between interest rate movements of government bonds (DV), and an IV of abnormal returns I have generated following specific events.
I need to measure what changes take place to a mean interest rate of several countries (DV), when the market has already reacted (IV) to the event I am interested in. So my DV is the change in the mean interest rate of several countries, while the IV is the abnormal return for each country's interest rate following the event.
The theory is that markets should react to changes peer group countries' interest rates, so as the IV increases (it can also be negative), the change in the DV should increase. I was thinking to use a simple OLS regression,with a range of fixed effects, but would that be acceptable?