The signalling role of base and money announcements and their effects on interest rates

John Huizinga*, Leonardo Leiderman

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This paper demonstrates that unexpected changes in the announced monetary base have an impact on interest rates above and beyond the impact of unexpected changes in the announced money supply. In addition, both money supply and monetary base announcements are shown to have a significant signalling role for subsequent changes in monetary aggregates. However, in contrast to several leading hypotheses, it appears that the observed link between monetary announcements and interest rates is not attributable to the signals that announcements provide about the subsequent behavior of money and the base.

Original languageEnglish
Pages (from-to)439-462
Number of pages24
JournalJournal of Monetary Economics
Volume20
Issue number3
DOIs
StatePublished - Dec 1987

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