High real interest rates in the aftermath of disinflation: is it a lack of credibility?

Graciela Kaminsky () and Leonardo Leiderman

No 543, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: High real interest rates have been observed in many countries for several months after the adoption of disinflation programs. While they may reflect primarily a liquidity crunch, high ex post real interest rates can also be explained in terms of an ex post error in inflation expectations that reflects a lack of credibility of the low-inflation policy. The latter hypothesis is tested using data for Argentina, Israel, and Mexico during the implementation of the stabilization programs in the mid-1980s.

Keywords: Interest; rates (search for similar items in EconPapers)
Date: 1996
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: High real interest rates in the aftermath of disinflation: is it a lack of credibility? (1998)
Working Paper: High Real Interest Rates in the Aftermath of Disinflation: Is It a Lack of Credibility (1996)
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