NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Monetary Policy and Long-Term Interest Rates: An Efficient Markets Approach

Frederic S. Mishkin

NBER Working Paper No. 517 (Also Reprint No. r0157)
Issued in July 1980
NBER Program(s):   EFG

This paper is an application of efficient markets theory to analyze empirically the relationship of money supply growth and long-term interest rates. This approach has the advantage over earlier research on this subject in that it imposes a theoretical structure on this relationship that allows easier interpretation of the empirical results as well as more powerful statistical tests. In the interest of ascertaining the robustness of the results, many different empirical tests are carried out in this paper, and they uniformly do not support the proposition that increases in the money supply are correlated with declines in long rates.

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Document Object Identifier (DOI): 10.3386/w0517

Published: Mishkin, Frederic S. "Monetary Policy and Long-Term Interest Rates: An Efficient Markets Approach." Journal of Monetary Economics, Vol. 7, No. 1, (January 1981), pp. 1-27. citation courtesy of

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