No. 178. Some Further Evidence on Interest-Rate Smoothing: The Role of Measurement Errors in the Output Gap
by Mikael Apel and Per Jansson
Abstract: 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.
