Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211555 
Authors: 
Year of Publication: 
1989
Series/Report no.: 
Bank of Finland Discussion Papers No. 20/1989
Publisher: 
Bank of Finland, Helsinki
Abstract: 
This paper analyzes the effect of anticipated inflation on nominal interest rates, paying special attention to the stability of this relationship over various regimes. These regimes are analyzed to find out whether the inflation forecastability proposition recently advanced by Barsky explains the observed poor performance of the Fisher equation with historical data. The analyses make use of the so-called threshold and digression models and data from 11 western countries for 1875 - 1984. The main result of this paper is that the forecastability proposition does not explain the weakness of the anticipated inflation effect on interest rates. Rather, various institutional factors seem to be of more importance.
Persistent Identifier of the first edition: 
ISBN: 
951-686-207-1
Document Type: 
Working Paper

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