The interest rate snap-back and its implication for the Keynesian-quantity theory dispute
Much recent work on the behaviour of interest rates has argued that both long term and short term interest rates decline only very temporarily when the growth rate of money increases. Nominal rates quickly snap back to their previous level. The present work looks at what these findings imply for the...
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| Format: | Article |
| Language: | English |
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Associazione Economia civile
2014-01-01
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| Series: | PSL Quarterly Review |
| Subjects: | |
| Online Access: | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11499 |
| _version_ | 1811172509965352960 |
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| author | T. MAYER |
| author_facet | T. MAYER |
| author_sort | T. MAYER |
| collection | DOAJ |
| description | Much recent work on the behaviour of interest rates has argued that both long term and short term interest rates decline only very temporarily when the growth rate of money increases. Nominal rates quickly snap back to their previous level. The present work looks at what these findings imply for the Keynesian-quantity theory dispute. The author shows that if the expected real interest rate actually does snap back rapidly, then this provides substantial support for the quantity theory and against Keynesian theory. Therefore, the interest rate snap-back becomes an important issue in the Keynesian-quantity theory debate.
JEL: E43, E12, E13
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| first_indexed | 2024-04-10T17:31:22Z |
| format | Article |
| id | doaj.art-6955104159834a5cbcd5c3628c99cc2c |
| institution | Directory Open Access Journal |
| issn | 2037-3635 2037-3643 |
| language | English |
| last_indexed | 2024-04-10T17:31:22Z |
| publishDate | 2014-01-01 |
| publisher | Associazione Economia civile |
| record_format | Article |
| series | PSL Quarterly Review |
| spelling | doaj.art-6955104159834a5cbcd5c3628c99cc2c2023-02-03T16:44:41ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36432014-01-012911810.13133/2037-3643/11499The interest rate snap-back and its implication for the Keynesian-quantity theory disputeT. MAYERMuch recent work on the behaviour of interest rates has argued that both long term and short term interest rates decline only very temporarily when the growth rate of money increases. Nominal rates quickly snap back to their previous level. The present work looks at what these findings imply for the Keynesian-quantity theory dispute. The author shows that if the expected real interest rate actually does snap back rapidly, then this provides substantial support for the quantity theory and against Keynesian theory. Therefore, the interest rate snap-back becomes an important issue in the Keynesian-quantity theory debate. JEL: E43, E12, E13 https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11499Interest ratesKeynesian theoryquantity theorysnap back |
| spellingShingle | T. MAYER The interest rate snap-back and its implication for the Keynesian-quantity theory dispute PSL Quarterly Review Interest rates Keynesian theory quantity theory snap back |
| title | The interest rate snap-back and its implication for the Keynesian-quantity theory dispute |
| title_full | The interest rate snap-back and its implication for the Keynesian-quantity theory dispute |
| title_fullStr | The interest rate snap-back and its implication for the Keynesian-quantity theory dispute |
| title_full_unstemmed | The interest rate snap-back and its implication for the Keynesian-quantity theory dispute |
| title_short | The interest rate snap-back and its implication for the Keynesian-quantity theory dispute |
| title_sort | interest rate snap back and its implication for the keynesian quantity theory dispute |
| topic | Interest rates Keynesian theory quantity theory snap back |
| url | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11499 |
| work_keys_str_mv | AT tmayer theinterestratesnapbackanditsimplicationforthekeynesianquantitytheorydispute AT tmayer interestratesnapbackanditsimplicationforthekeynesianquantitytheorydispute |