TY  - JOUR
AU  - Turnovsky,Stephen J.
TI  - The Term Structure of Interest Rates and the Effects of Macroeconomic Policy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2902
PY  - 1989
Y2  - October 1989
UR  - http://www.nber.org/papers/w2902
L1  - http://www.nber.org/papers/w2902.pdf
N1  - Author contact info:
Stephen Turnovsky
Department of Economics
301 Savery Hall; Mail Stop DK 30
University of Washington
Seattle, WA   98195
Tel: 206-545-8028
E-Mail: sturn@u.washington.edu
AB  - This paper analyzes the effects of monetary and fiscal policy shocks on the term structure of interest rates. The effects of temporary versus permanent, unanticipated versus anticipated, policy disturbances and the responses of long versus short, and real versus nominal, rates are contrasted. The main results are summarized in a series of propositions. Among them, the finding that an unanticipated permanent fiscal expansion impacts more on long-term rates, may help explain their observed excessive volatility. The effects of structural changes on the relative variances are also discussed, with the effect which operates through the impact on private speculative behavior being emphasized.
ER  -