Risk Effects versus Monetary Effects in the Determination of Short-Term Interest Rates
Bibliographic Data
| ID | 9725227 |
|---|---|
| Authors | Malcolm L Edey, Malcolm Edey (corresponding author) |
| Year | 1989 |
| Volume | 56 |
| Issue | 223 |
| Pages | 311 |
| Publication date | 1989-08-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | JSTOR (PUBLISHER) |
| DOI | 10.2307/2554280 |
| OpenAlex | W1979257749 |
| Language | EN |
| References cited | 3 |
Economic theory offers two distinct approaches to the modeling of interest rates. At the microeconomic level, interest rates are modeled as an outcome of intertemporal optimization by investors, so that real interest rates are determined entirely by the real variables that characterize risk. At the macroeconomic level, short-term behavior of interest rates is usually thought of as being governed by the money-demand function. This paper tests a model that encompasses both views, using data for four countries. The results suggest that risk factors are empirically insignificant in explaining interest-rate behavior. Copyright 1989 by The London School of Economics and Political Science
Econometrics · Economics · Interest rate · Monetary economics · Physics · Term (time) · Yield curve · Economic theories and models · Economic Theory and Policy · Monetary Policy and Economic Impact
| Citation velocity | historical |
|---|---|
| Highly cited | No |