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The symetry underlymg real interest rate behaviour and the limk to investment flows: an ex ante formal treatment.

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Peláez Ruiz-Fornells, Alejandro Francisco (2009) The symetry underlymg real interest rate behaviour and the limk to investment flows: an ex ante formal treatment. [ Documentos de Trabajo de la Facultad de Ciencias Económicas y Empresariales; nº 03, 2009, ISSN: 2255-5471 ]

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URL Oficial: http://eprints.ucm.es/8671/




Resumen

From a purely speculative approach and under the usual assumptions, a wellknown symmetrical structure appears, connecting neoclassical and Keynesian views of the markets. This framework admits graphical and formal explanation.
In previous work, we addressed this topic reaching some conclusions. Now that the credit bust spreads worldwide, we focus on formal analysis leading to more advanced results linked to our previous perspective that seems to hold. Using an ex ante formal treatment, we conclude that when applied to explain real interest rate behaviour, this symmetrical look shows a countercyclical pattern of response for this variable in neoclassical approach, while being procyclical from Keynesian view. This implies either a magnifying or a stabilizing role for the real rate in each case and could affect the financial to real investment flows ratio and, as a result, aggregate capital stock composition. The trend this ratio could follow, though difficult to explain, is of great interest to help explain the behaviour of financial markets. This appears as a key feature to approach the focal points of the financial markets reform.


Tipo de documento:Documento de trabajo o Informe técnico
Palabras clave:Symmetry interest rate, Capital stock, Capital composition, Financial markets, Business cycle, Investment flows.
Materias:Ciencias Sociales > Economía > Teorías económicas
Título de serie o colección:Documentos de Trabajo de la Facultad de Ciencias Económicas y Empresariales
Volumen:2009
Número:03
Código ID:8671
Depositado:16 Mar 2009 17:04
Última Modificación:04 Dic 2015 08:18

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