Why Do Central Banks Smooth Interest Rates?

Gabriel Srour

Staff Working Papers from Bank of Canada

Abstract: It is commonly observed that central banks respond gradually to economic shocks, moving the interest rate in small discrete steps in the same direction over an extended period of time. This paper examines the empirical evidence regarding central banks' smoothing of interest rates, paying particular attention to the case of Canada. It then reviews the alternative explanations of the stylized facts that have recently emerged in the literature.

Keywords: Monetary; policy; implementation (search for similar items in EconPapers)
JEL-codes: E5 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2001
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:01-17

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