THE EFFECT OF FISCAL POLICY ON THE SHORT‐RUN RELATION BETWEEN NOMINAL INTEREST RATES AND INFLATION
作者:
VICTOR A. CANTO,
GERALD NICKELSBURG,
PAUL RIZOS,
期刊:
Economic Inquiry
(WILEY Available online 1987)
卷期:
Volume 25,
issue 1
页码: 27-42
ISSN:0095-2583
年代: 1987
DOI:10.1111/j.1465-7295.1987.tb00720.x
出版商: Blackwell Publishing Ltd
数据来源: WILEY
摘要:
This paper presents a simple empirical model of the relation between the inflation rate and the nominal interest rate. We show that previous results found in the literature may be attributed to specification error and that there are natural explanations for the observed signs of previous Fisher equation estimates. Our results show that fiscal policy shocks may generate short run negative correlations between changes in inflation and changes in the nominal interest rates. These results illustrate the difficulty in discussing the relation between inflation and nominal interest rates without conditioning the analysis with specific assumptions on the course of the economy.
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