Some Further Evidence on Interest-Rate Smoothing: The Role of Measurement Errors in the Output Gap
Sveriges Riksbank Working Paper No. 178
17 Pages Posted: 19 Oct 2006
Date Written: October 19, 2006
It has been suggested that interest-rate smoothing may be partly explained by an omitted variable that relates to conditions in financial markets. We propose an alternative interpretation that suggests that it relates to measurement errors in the output gap.
Keywords: Interest-rate smoothing, Measurement errors, Output gap
JEL Classification: E43, E44, E52
Suggested Citation: Suggested Citation