High yields: the spread on German interest rates

Article Abstract:

An analysis of the determinants of interest rate differentials reveals that three determinants may be found which include expectations of exchange rate depreciation; market assessment of default risk; and different taxation treatment of long-term yields. Daily frequencies of exchange are used in the data and the countries involved include Italy, Spain, Sweden and Germany. The research provided evidence that spreads of Spanish and Italian bonds share a similar trend, which is said to be caused by international factors and is not dependent on country-specific shocks.

Italy, Economic aspects, Germany, Spain

---

Disinflation and interest-bearing money

Article Abstract:

An analysis of the effectiveness of reversing inflation through payment of higher interest on money is performed in the context of an optimizing, open-economy, flexible-prices model. Findings show that both a permanent and a temporary increase in the interest rate on money induce an initial drop in inflation at the expense of a recession. However, if the increase is temporary, the initial inflation slowdown is consequently followed by an inflation hike over the level that prevailed before the policy was enacted.

Money supply

---

Inflation stabilisation and the consumption of durable goods

Article Abstract:

A boom-bust cycle has been observed on chronic-inflation nations, such as Chile, Argentina and Uruguay, undergoing exchange rate-based stabilization programs. It was shown that the generation of wealth from initial inflationary fall has created an aggregate consumption boom, in which consumers increased their spending on buying durable goods. A slowdown ensued after the boom as consumers replenish their stock of durable goods during the initial stage of the program.

Analysis, Consumption (Economics)

Similar abstracts:

• Abstracts: What do interest rates reveal about the functioning of real business cycle models? The term structure of interest rates in real and monetary economies
• Abstracts: Understanding exchange rate volatility without the contrivance of macroeconomics
• Abstracts: Persistence in foreign exchange rates. Exchange rate variation, commodity price variation and the implications of international trade
• Abstracts: A household level study of the determinants of incomes and consumption. Efficiency, equity and poverty alleviation: policy issue in less developed countries

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.