The Term Structure of Interest Rates in a Small Open Economy: A Stochastic Analysis
This article employs a rational expectations IS-LM model with price adjustment to study the effect of domestic monetary and fiscal policy and world interest rate disturbances on the real and nominal small open economy term structure of interest rates. The impact of both temporary and permanent shocks are investigated. Notable results include the fact that monetary expansions lead to positive yield curves, while the implications of fiscal expansions and increases in the world interest rate depend crucially on the duration of the shock. Copyright Kluwer Academic Publishers 2000
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- Turnovsky, S.J., 1989.
"The Term Structure Of Interest Rates And The Effets Of Macroeconomics Policy,"
Discussion Papers in Economics at the University of Washington
89-03, Department of Economics at the University of Washington.
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- Turnovsky, S.J., 1989. "The Term Structure Of Interest Rates And The Effets Of Macroeconomics Policy," Working Papers 89-03, University of Washington, Department of Economics.
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Journal of International Economics,
Elsevier, vol. 20(3-4), pages 291-311, May.
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