IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-05455757.html

Interest rates, government purchases and the Taylor rule in recessions and expansions

Author

Listed:
  • Antonia López-Villavicencio

    (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper we study asymmetries in the Taylor rule for the United States during the 1970-2012 period. We show that monetary authorities have been constantly concerned with excess demand in overheated periods -when the output gap is positive or the unemployment rate falls below 7 or 7.5 percentraising the interest rate aggressively in that case. However, the Fed seems more reluctant to decrease the fund's rate during recessions. On the contrary, monetary authorities react symmetrically to inflation in booms and busts. Finally, we provide evidence that an expansionary fiscal policy does not lead to an increase in interest rates, and thus there is not necessary a "crowding-out" effect in recession.

Suggested Citation

  • Antonia López-Villavicencio, 2013. "Interest rates, government purchases and the Taylor rule in recessions and expansions," Post-Print hal-05455757, HAL.
    • Handle: RePEc:hal:journl:hal-05455757
    DOI: 10.1016/j.jmacro.2013.08.019
    Note: View the original document on HAL open archive server: https://hal.science/hal-05455757v1
    as

    Download full text from publisher

    File URL: https://hal.science/hal-05455757v1/document
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jmacro.2013.08.019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-05455757. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.