Prediction of the economic activity from the short and long-term interest rate differential: New evidences in Chile and the United States of America cases

David Cademartori, RODRIGO FRANCISCO NAVIA CARVALLO, Manuel Galea, Felipe Osorio

Research output: Contribution to journalArticlepeer-review

Abstract

The purpose of this work is to verify the stability of the relationship between real activity and interest rate spread. The test is based on Chen (1988) and Osorio and Galea (2006). The analysis is applied to Chile and the United States, from 1980 to 1999. In general, in both cases the relationship was statistically significant in early 80s, but a break point is found in both countries during that decades, suggesting that the relationship depends on the monetary rule follow by the Central Bank.

Original languageEnglish
Pages (from-to)707-712
Number of pages6
JournalApplied Economics Letters
Volume15
Issue number9
DOIs
StatePublished - Jul 2008
Externally publishedYes

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