An Empirical Study of Interest Rate Determination

the probability of an equal percentage change occurring is far smaller for R. In terms of equally probable changes, income has a greater impact on interest rates than unborrowed reserves. The partial correlation coefficients present less clear evidence as to the relative contributions of R. and Y. The partials are greater for R. than for Y in the equations for 1953-1960, but greater for Y than for R,2 in the 1961-1965 period. For the overall period, the partials are greater for RX when the equations are specified in the H-S form for 19531960 and for Y when the equations are specified in the H-S form for 1961-1965. Thus, the partial correlation coefficients also provide little evidence in support of H-S's conclusion that RX has a greater impact on interest rates than Y. , i the 1961-1965 period. For the over

Econometrics · Economics · Interest rate · Monetary economics · Monetary Policy and Economic Impact