Riksbank research suggests inflation correlated with policy rate in some cases
‘Empirical support’ for claim that low inflation follows low interest rates, paper claims
Nominal interest rates and inflation are positively correlated in both the short and long term, two economists from the Swedish Riksbank argue in research published today.
The economists base their analysis on the work of the US economist Irving Fisher. They say their findings provide "empirical support to the idea that a low policy rate over the long run could lead to low inflation".
Magnus Jonsson and André Reslow of Sveriges Riksbank's monetary policy department present data showing that
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