Multifactor Keynesian models of the long-term interest rate

This paper presents multifactor Keynesian models of the long-term interest rate. In recent years, there have been a proliferation empirical studies based on approach to rate modelling. These evince connection between and short-term However, standard in quantitative finance not yet incorporated Keynes’s insights about dynamics. are introduced two different illustrate how relates rate, after controlling for central bank’s policy expected inflation, inflation target, volatility financial markets, Wiener processes.