INTEREST-RATES, EXPECTATIONS AND THE CREDIBILITY OF THE BANK OF SPAIN

The purpose of the paper is to pinpoint the date of the change of mone tary policy regime which occurred in Spain during the year 1984, when it moved away from controlling monetary aggregates towards interest ra te targeting. The most likely date for the change is estimated and, su rprisingly, there is evidence that agents learned about the new interm ediate target quite rapidly. A week after the change, the term structu re of interest rates showed how market agents attributed much more inf ormational content to interest rate changes than they had previously. Two types of transitions are tried: a one-step and a gradual logistic switching function.