Plot the expected real interest rate since 1979 by subtracting the Michigan survey inflation measure (FRED code:

Question:

Plot the expected real interest rate since 1979 by subtracting the Michigan survey inflation measure (FRED code: MICH) from the three-month Treasury bill rate (FRED code: TB3MS). Plot as a second line the ex post or realized real interest rate by subtracting from the three-month Treasury bill rate (FRED code: TB3MS) the actual inflation rate based on the percent change from a year ago of the consumer price index (FRED code: CPIAUCSL). What does it mean when these two measures are different?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Money Banking and Financial Markets

ISBN: 978-0078021749

4th edition

Authors: Stephen Cecchetti, Kermit Schoenholtz

Question Posted: