Liquidity and Irish Interest Rates
In recent papers (1993a and b) we have focused on the role of expectations in influencing Irish interest rates during the EMS period. Here we examine the role of monetary policy actions more directly, and explore the relation between interest rates, on the one hand, and actions of the monetary authorities in supplying liquidity to, and withdrawing it from, the market on the other. Though it is not clear just how effective recent Central Bank liquidity interventions have been in influencing interest rates, there is evidence of a change in policy towards a more aggressive attempt to stabilize rates after mid-1988. Before then, the reaction of Central Bank intervention to interest rate pressures was very modest (£20 million per one per cent movement in interest rates)and the impact cannot have been great.
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Elsevier, vol. 30(3), pages 449-465, December.
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"Liquidity Effects and the Monetary Transmission Mechanism,"
American Economic Review,
American Economic Association, vol. 82(2), pages 346-53, May.
- Lawrence J. Christiano & Martin Eichenbaum, 1992. "Liquidity effects and the monetary transmission mechanism," Staff Report 150, Federal Reserve Bank of Minneapolis.
- Lawrence J. Christiano & Martin Eichenbaum, 1992. "Liquidity Effects and the Monetary Transmission Mechanism," NBER Working Papers 3974, National Bureau of Economic Research, Inc.
- Patrick Honohan & Charles Conroy, 1994. "Excess Returns on Irish Pound Assets in the EMS," Papers WP047, Economic and Social Research Institute (ESRI).
- Giavazzi, Francesco & Spaventa, Luigi, 1990.
"The `New' EMS,"
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369, C.E.P.R. Discussion Papers.
- Patrick Honohan, 1994. "Interest Rate Policy in Practice: A Review with some Implications for the Irish Banking System in the EMS," Papers WP046, Economic and Social Research Institute (ESRI).
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