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Interest Rates and Output in the Long-run

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  • Yunus Aksoy
  • Miguel León-Ledesma

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Abstract

In this paper we argue that both statistics and economic theory-based evidence largely indicate the absence of long run relationships between the real output and the most relevant monetary indicator for the UK and the US short term interest rates. These findings are not only a full sample result, but also valid in most of the subsamples throughout the second half of the 20th century.

Suggested Citation

  • Yunus Aksoy & Miguel León-Ledesma, 2004. "Interest Rates and Output in the Long-run," Studies in Economics 0409, School of Economics, University of Kent.
  • Handle: RePEc:ukc:ukcedp:0409
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Reginaldo Pinto Nogueira, 2009. "Is monetary policy really neutral in the long-run? Evidence for some emerging and developed economies," Economics Bulletin, AccessEcon, vol. 29(3), pages 2432-2437.
    2. Mallick, Sushanta K. & Sousa, Ricardo M., 2013. "The real effects of financial stress in the Eurozone," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 1-17.
    3. Bharat Chadha, 2007. "Impact of U.S. Federal Interest Rate and Movement of MSCI on Indian Capital Markets," Working Papers id:1024, eSocialSciences.
    4. Faria, João Ricardo & Mollick, André Varella & Sachsida, Adolfo & Wang, Le, 2012. "Do central banks affect Tobin's q?," International Review of Economics & Finance, Elsevier, vol. 22(1), pages 1-10.
    5. International Monetary Fund, 2005. "Monetary Policy and Corporate Behavior in India," IMF Working Papers 05/25, International Monetary Fund.

    More about this item

    Keywords

    information value; long term relationship; cointegration; bounds tests;

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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