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Journal of Economics and Finance

, Volume 22, Issue 2–3, pp 5–12 | Cite as

Reexamining the term structure of interest rates and the interwar demand for money

  • Christopher F. Baum
  • Clifford F. Thies
Article

Abstract

This paper reexamines whether the term structure of interest rates, rather than merely a single interest rate, should be included in the demand for money of the interwar era. In contrast to earlier work, we use cointegration techniques to model the equilibrium/error correction process, and find that a sufficiently rich dynamic model using a single interest rate has considerable explanatory power. Nevertheless, we conclude that the inclusion of the term structure may help to explain the turbulent monetary dynamics of the Depression era.

Keywords

Interest Rate Term Structure York Stock Exchange Money Demand Function Term Premium 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer 1998

Authors and Affiliations

  • Christopher F. Baum
    • 1
  • Clifford F. Thies
    • 2
  1. 1.Department of EconomicsBoston CollegeChestnut Hill
  2. 2.Byrd School of BusinessShenandoah UniversityWinchester

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