Can we explain unexpected fluctuations of long-term real interest rate?

Barbora Volná

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arXiv · 1211.2709

Can we explain unexpected fluctuations of long-term real interest rate?

Barbora Volná

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Abstract

In this paper, we present own point of view how the unexpected fluctuations of the long-term real interest rate can be explained. We describe a macroeconomic environment by the modification of the fundamental macroeconomic equilibrium model called the IS-LM model. Last but not least, we suggest a possible cooperation between the fiscal and monetary policy to reduce these fluctuations. Our modelling is demonstrated on an illustrative example.

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Barbora Volná. 2012-11-12. Can we explain unexpected fluctuations of long-term real interest rate?. https://arxiv.org/abs/1211.2709

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