Estimating the Long-Run Relationship Between Interest Rates and Inflation: A Response to McCallum
AbstractThis note demonstrates that Bennett McCallum's recent critique of low frequency estimates of macro-economic relationships is of little empirical significance. It also demonstrates that readily available and frequently used techniques can be used to diagnose the problem McCallum raises. Finally, it shows that the standard critique of expectational distributed lags is not warranted once the role of learning by economic agents is recognized.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1448.
Date of creation: Apr 1990
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Publication status: published as Summers, Lawrence H. "Estimating the Long-Run Relationship between Interest Rates and Inflation." From Journal of Monetary Economics, Vol. 18, No. 1, pp. 77-86, (July 1986).
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- Summers, Lawrence H., 1986. "Estimating the long-run relationship between interest rates and inflation: A response to McCallum," Journal of Monetary Economics, Elsevier, Elsevier, vol. 18(1), pages 77-86, July.
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