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Tasa de interes e inflacion : una nota aclaratoria

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  • Posada Posada, Carlos Esteban

Abstract

The traditional IS-LM model has been used by macroeconomic textbooks to explain, amongst other things, the level and the changes in the interest rate. According to this paper, this model is irrelevant and inefficient in explaining the positive effect of a greater expected inflation rate, in relation to the nominal interest Rate. In effect, and increase in the nominal rate of interest, that is not accompanied by an increase in real income, supposes according to the IS-LM model, a contraction in the supply of real money balances or opposedly an increase in their demand (in other words, the LM curve would shift to the left, if we employed the usual graphic representation of this basic model, which shows the possible combinations of interest rates and real income, that guarantee equilibrium in the product and money markets). But it would lead nowhere to think that an increase in the expected rate of inflation would imply these alterations in the demand or supply of real money balances. Nevertheless, the author considers this model can be pertinent in explaining other sources of changes in the interest rate.

Suggested Citation

  • Posada Posada, Carlos Esteban, 1985. "Tasa de interes e inflacion : una nota aclaratoria," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 17, pages 149-156.
  • Handle: RePEc:lde:journl:y:1985:i:17:p:149-156
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    References listed on IDEAS

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    1. No authors listed, 1983. "Editorial," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 9(4), pages 497-501.
    2. A. Steven Holland, 1984. "Real interest rates: what accounts for their recent rise?," Review, Federal Reserve Bank of St. Louis, issue Dec, pages 18-29.
    3. Gordon Tullock, 1983. "Editorial," Public Choice, Springer, vol. 40(1), pages 5-5, January.
    4. Turnovsky,Stephen J., 1977. "Macroeconomic Analysis and Stabilization Policy," Cambridge Books, Cambridge University Press, number 9780521291873, May.
    5. No authors listed, 1983. "Editorial," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 9(2), pages 175-178.
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