EXPLORING THE REAL INTEREST-RATE PUZZLE

Authors
BREWER E KAUFMAN GG
Citation
E. Brewer et Gg. Kaufman, EXPLORING THE REAL INTEREST-RATE PUZZLE, The Quarterly review of economics and finance, 34(4), 1994, pp. 363-373
Citations number
17
Categorie Soggetti
Business Finance",Economics
Journal title
The Quarterly review of economics and finance → ACNP
ISSN journal
10629769
Volume
34
Issue
4
Year of publication
1994
Pages
363 - 373
Database
ISI
SICI code
1062-9769(1994)34:4<363:ETRIP>2.0.ZU;2-6
Abstract
This paper analyzes the puzzling behavior of real interest rates over the 1970-1990 period. Using data on expectations of future prices chan ges to estimate the expected real rate of interest, we find that the r eal rate was not so low as reported in the 1970s nor so high as report ed in the 1980s. However, the expected real rate is still substantiall y lower in the 1970s than in the 1980s and the abrupt large structural change that occurred in 1979-81 still exists.