Interest rates, commodity price changes and Gibson's paradox

W. W. Brown and G. J. Santoni

No 1983-004, Working Papers from Federal Reserve Bank of St. Louis

Abstract: This paper argues that the positive relationship between the level of prices and interest rates noted by Gibson arises, in part, because measured prices indexes, which are comprised primarily of the prices of short-lived consumption goods, and nominal interest rates are both driven in the same direction by changes in the real rate of interest.

Keywords: Interest rates; Prices (search for similar items in EconPapers)
Date: 1987
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DOI: 10.20955/wp.1983.004

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