NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Real Interest Rate, Credit Markets, and Economic Stabilization

Paul Jenkins, Carl E. Walsh

NBER Working Paper No. 1575 (Also Reprint No. r1007)
Issued in March 1985
NBER Program(s):Monetary Economics

The role of a real interest rate and a credit aggregate as intermediate monetary policy targets are investigated under the assumption of rational expectations. The analysis expands a standard aggregate model to include a credit market and a market determined interest rate on bank deposits. This allows the implications for output stabilization of real interest rate policy to be examined for a wider variety of shocks than normally considered in the literature, as well as allowing a credit aggregate policy to be studied.

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Document Object Identifier (DOI): 10.3386/w1575

Published: Jenkins, Paul and Carl E. Walsh. "Real Interest Rate, Credit Markets, and Economic Stabilization," Journal of Macroeconomics, Vol. 9, No. 1, Winter 1987, pp. 95-108. citation courtesy of

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