Economics, Econometrics and Finance
4 years ago

New research reveals international impact of long-term interest rates on economies

RePEc: Research Papers in Economics
Long-run causality, with an application to international links between long-term interest rates
Catherine Bruneau, Éric Jondeau

Paper Summary

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The article defines long-run causality as one variable influencing another over time. By analyzing US, German, and French long-term interest rates from 1990 to 1997, the researchers found that past knowledge of one country's rates can help predict another's in the long term. They used a statistical method to test for these causal links, showing that certain interest rates are connected in the long run.