NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Monetary Policy with Flexible Exchange Rates and Forward Interest Rates as Indicators

Lars E.O. Svensson

NBER Working Paper No. 4633 (Also Reprint No. r1953)
Issued in January 1994
NBER Program(s):   IFM   ME

In the new situation with flexible exchange rates, monetary policy in Europe will have to rely more on indicators than previously under fixed rates. One of the potential indicators, the forward interest rate curve, can be used to indicate market expectations of the time-paths of future short interest rates, monetary policy, inflation rates and currency depreciation rates. The forward rate curve separates market expectations for the short, medium and long term more easily than the standard yield curve. Monetary policy in France, Germany, Great Britain, Sweden and the United States is interpreted with the help of forward rates.

download in pdf format
   (409 K)

email paper

This paper is available as PDF (409 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4633

Published: Banque de France, Cahiers economiques et monetaires, ed. Jean-Marie Roux,vol. 43, no. 0396-4701, pp 305-332, (1994)

Users who downloaded this paper also downloaded these:
Svensson w4871 Estimating and Interpreting Forward Interest Rates: Sweden 1992 - 1994
Bernanke and Mishkin w5893 Inflation Targeting: A New Framework for Monetary Policy?
Branson and Buiter w0901 Monetary and Fiscal Policy with Flexible Exchange Rates
Obstfeld and Rogoff w5191 The Mirage of Fixed Exchange Rates
Horioka w12142 The Causes of Japan's "Lost Decade": The Role of Household Consumption
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us