Estimating the Long-Run Relationship between Interest Rates and Inflation: a Response to Mccallum

14 Pages Posted: 27 Apr 2000 Last revised: 30 Jan 2002

See all articles by Lawrence H. Summers

Lawrence H. Summers

Harvard University; National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Date Written: September 1984

Abstract

This note demonstrates that Bennett McCallum's recent critique of low frequency estimates of macro-economic relationships is of little empirical significance. It also demonstrates that readily available and frequently used techniques can be used to diagnose the problem McCallum raises. Finally, it shows that the standard critique of expectational distributed lags is not warranted once the role of learning by economic agents is recognized.

Suggested Citation

Summers, Lawrence H., Estimating the Long-Run Relationship between Interest Rates and Inflation: a Response to Mccallum (September 1984). NBER Working Paper No. w1448. Available at SSRN: https://ssrn.com/abstract=227490

Lawrence H. Summers (Contact Author)

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Harvard University - Harvard Kennedy School (HKS) ( email )

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