NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Interest Rates, Money Supply Announcements, and Monetary Base Announcements

John Huizinga, Leonardo Leiderman

NBER Working Paper No. 1705
Issued in September 1985
NBER Program(s):   EFG   ME

This paper presents a new set of empirical regularities on the link between interest rates, money supply announcements and monetary base announcements. Among the main findings reported are: (i) unexpected increases in the announced monetary base have a significantly positive effect on interest rates during the period from October 1979 to October 1982; (ii) although unexpected money supply and monetary base announcements have the same impact on interest rates, they have different implications for the future behavior of the money supply and monetary base; (iii) the significant response of longer-term interest rates to unexpected monetary announcements is reflecting a response of current and expected future short-term rates -- i.e.term-structure premia are not altered by these announcements.

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Document Object Identifier (DOI): 10.3386/w1705

Published: Huizinga, John and Leonardo Leiderman. "The Signalling Role Of Base And Money Announcements And Their Effects On Interest Rates," Journal of Monetary Economics, 1987, v20(3), 439-462.

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