Why are Long Rates Sensitive to Monetary Policy
Tore Ellingsen () and
Ulf Söderström ()
No 256, Working Papers from IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University
We use a quantitative model of the U.S. economy to analyze the response of long-term interest rates to monetary policy, and compare the model results with empirical evidence. We ?nd that the strong and time-varying yield curve response to monetary policy innovations found in the data can be explained by the model. A key ingredient in explaining the yield curve response is central bank private information about the state of the economy or about its own target for in?ation.
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Working Paper: Why are Long Rates Sensitive to Monetary Policy? (2004)
Working Paper: Why Are Long Rates Sensitive to Monetary Policy? (2004)
Working Paper: Why are long rates sensitive to monetary policy? (2004)
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