Asymmetric Impacts of Inflation on the US Bond Rates and FED’s Pre-Emptive Policy
This study investigates the asymmetric impacts of changes in inflation rates on the US bond rates. This investigation is constructed on the Fisher Equation. To this end, the nonlinear ARDL model is applied. Empirical findings indicate that only the decreases (πt-) in inflation rates affect bond rate...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
SGH Warsaw School of Economics, Collegium of Economic Analysis
2020-11-01
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| Series: | Econometric Research in Finance |
| Subjects: | |
| Online Access: | https://www.erfin.org/journal/index.php/erfin/article/view/102 |
| _version_ | 1798023274668490752 |
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| author | İsmet Göçer Serdar Ongan |
| author_facet | İsmet Göçer Serdar Ongan |
| author_sort | İsmet Göçer |
| collection | DOAJ |
| description | This study investigates the asymmetric impacts of changes in inflation rates on the US bond rates. This investigation is constructed on the Fisher Equation. To this end, the nonlinear ARDL model is applied. Empirical findings indicate that only the decreases (πt-) in inflation rates affect bond rates. This asymmetric impact therefore shapes the FED’s monetary policy in terms of determining the bond rates at lower cost. When the inflation rate rises, the FED will know (in advance) that they do not need to increase the bond rates. This reminds us the FED’s former pre-emptive strike policy against inflation. |
| first_indexed | 2024-04-11T17:43:41Z |
| format | Article |
| id | doaj.art-cad2746d92fe4a158414a79956c55ddb |
| institution | Directory Open Access Journal |
| issn | 2451-1935 2451-2370 |
| language | English |
| last_indexed | 2024-04-11T17:43:41Z |
| publishDate | 2020-11-01 |
| publisher | SGH Warsaw School of Economics, Collegium of Economic Analysis |
| record_format | Article |
| series | Econometric Research in Finance |
| spelling | doaj.art-cad2746d92fe4a158414a79956c55ddb2022-12-22T04:11:26ZengSGH Warsaw School of Economics, Collegium of Economic AnalysisEconometric Research in Finance2451-19352451-23702020-11-015210.2478/erfin-2020-0008Asymmetric Impacts of Inflation on the US Bond Rates and FED’s Pre-Emptive Policyİsmet Göçer0Serdar Ongan1Department of Econometrics, Aydın Adnan Menderes University, TurkeyDepartment of Economics, St. Mary's College of Maryland, United StatesThis study investigates the asymmetric impacts of changes in inflation rates on the US bond rates. This investigation is constructed on the Fisher Equation. To this end, the nonlinear ARDL model is applied. Empirical findings indicate that only the decreases (πt-) in inflation rates affect bond rates. This asymmetric impact therefore shapes the FED’s monetary policy in terms of determining the bond rates at lower cost. When the inflation rate rises, the FED will know (in advance) that they do not need to increase the bond rates. This reminds us the FED’s former pre-emptive strike policy against inflation.https://www.erfin.org/journal/index.php/erfin/article/view/102Fisher EffectNonlinear and Linear ARDL ModelsThe FEDPreemptive Strike |
| spellingShingle | İsmet Göçer Serdar Ongan Asymmetric Impacts of Inflation on the US Bond Rates and FED’s Pre-Emptive Policy Econometric Research in Finance Fisher Effect Nonlinear and Linear ARDL Models The FED Preemptive Strike |
| title | Asymmetric Impacts of Inflation on the US Bond Rates and FED’s Pre-Emptive Policy |
| title_full | Asymmetric Impacts of Inflation on the US Bond Rates and FED’s Pre-Emptive Policy |
| title_fullStr | Asymmetric Impacts of Inflation on the US Bond Rates and FED’s Pre-Emptive Policy |
| title_full_unstemmed | Asymmetric Impacts of Inflation on the US Bond Rates and FED’s Pre-Emptive Policy |
| title_short | Asymmetric Impacts of Inflation on the US Bond Rates and FED’s Pre-Emptive Policy |
| title_sort | asymmetric impacts of inflation on the us bond rates and fed s pre emptive policy |
| topic | Fisher Effect Nonlinear and Linear ARDL Models The FED Preemptive Strike |
| url | https://www.erfin.org/journal/index.php/erfin/article/view/102 |
| work_keys_str_mv | AT ismetgocer asymmetricimpactsofinflationontheusbondratesandfedspreemptivepolicy AT serdarongan asymmetricimpactsofinflationontheusbondratesandfedspreemptivepolicy |