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On the (In) Dependence of Interest-Rate Setting in a Small Open Economy - the Case of Belgium 1976-1983

Published online by Cambridge University Press:  17 August 2016

Rudi Acx  and
Marc Quintyn
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Extract

For a longer period than has ever been the case in the past, these last few years have been marked by historically high levels of interest rates, as well as by an inversion of the yieldcurve.

Given these extra-ordinary context, we think it right to renew our interest in the determination process of what is called the « domestic » interest rate in a small open economy. This is all the more important as the causes of interest rate volatility in the Belgian case may prove to be situated not only on an international level. They may also be found in domestic factors as e.g. the increase in the government debt (for a survey, see Fayt (1981)).

This article is another contribution to the series of studies made in the seventies by e.g. De Generale Bankmaatschappij (1971), Hernandez-Lopez (1973), Clavijo and Kervyn (1974), Vuchelen (1976 and 1977c) and a more recent contribution of Reding, Jehin and Abraham (1982).

Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 49 , Issue 3 , September 1983 , pp. 307 - 325
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1983 

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Footnotes

(°)

At the time of writing Rudi ACX was Research Assistent of the National Fund for Scientific Research (Belgium) at the Seminar for Financial Economics (State University of Ghent), while Marc Quintyn was assistent at the same seminar. We are indebted to Prof. Dr. H. Verwilst and two anonymous referees of this Journal for comments on an earlier draft.

References

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