Using the Term Structure of Interest Rates for Monetary Policy

Goodfriend, Marvin

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Using the Term Structure of Interest Rates for Monetary Policy

FRB Richmond Economic Quarterly, vol. 84, no. 3, Summer 1998, pp. 13-30

18 Pages Posted: 21 Nov 2012

See all articles by Marvin Goodfriend

Marvin Goodfriend

Carnegie Mellon University - David A. Tepper School of Business; National Bureau of Economic Research (NBER)

Date Written: 1998

Abstract

The term structure of interest rates serves both as a vital link in the transmission of monetary policy and as an indicator of inflation expectations. The term structure is used here in a new application to address the 'policy in the pipeline problem.' Likewise, a peso-problem interpretation involving inflation scares can resolve some anomalies in the term structure data. Nevertheless, pitfalls still remain in using the term structure for tactical purposes.

Suggested Citation: Suggested Citation

Goodfriend, Marvin, Using the Term Structure of Interest Rates for Monetary Policy (1998). FRB Richmond Economic Quarterly, vol. 84, no. 3, Summer 1998, pp. 13-30, Available at SSRN: https://ssrn.com/abstract=2126283