ISSN:
1573-708X
Keywords:
open economy
;
term structure
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract This article employs a rational expectations IS-LM model with price adjustment to study the effect of domestic monetary and fiscal policy and world interest rate disturbances on the real and nominal small open economy term structure of interest rates. The impact of both temporary and permanent shocks are investigated. Notable results include the fact that monetary expansions lead to positive yield curves, while the implications of fiscal expansions and increases in the world interest rate depend crucially on the duration of the shock.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1023/A:1008326924208