TY - JOUR
T1 - A long view of real rates
AU - Chadha, Jagjit Singh
AU - Dimsdale, N
PY - 1999
Y1 - 1999
N2 - In light of the large and sustained rise in real interest rates in the late 1970s and early 1980s, this paper reviews: (i) the theoretical discussion on the determination of nominal and real interest rates; (ii) the factors determining real interest rates; and (iii) problems of defining and measuring the real rate. We go on to examine the historical record of real interest rates in France, Germany, the UK, and the USA since 1875. We find that high real rates since 1980 seem to be a return to a long-run norm, and it is the period from the Second World War to 1979 that represents a more natural period in which to investigate an abrupt change of behaviour for real interest rates.
AB - In light of the large and sustained rise in real interest rates in the late 1970s and early 1980s, this paper reviews: (i) the theoretical discussion on the determination of nominal and real interest rates; (ii) the factors determining real interest rates; and (iii) problems of defining and measuring the real rate. We go on to examine the historical record of real interest rates in France, Germany, the UK, and the USA since 1875. We find that high real rates since 1980 seem to be a return to a long-run norm, and it is the period from the Second World War to 1979 that represents a more natural period in which to investigate an abrupt change of behaviour for real interest rates.
UR - http://www.scopus.com/inward/record.url?scp=0032755918&partnerID=8YFLogxK
U2 - 10.1093/oxrep/15.2.17
DO - 10.1093/oxrep/15.2.17
M3 - Article
SN - 0266-903X
VL - 15
SP - 17
EP - 45
JO - Oxford Review of Economic Policy
JF - Oxford Review of Economic Policy
IS - 2
ER -