The Discount Rate and Market Interest Rates: Theory and Evidence
نویسنده
چکیده
HE relationship between the Federal Reserve’s discount rate and money market interest rates continues to be a topic of nuch interest and even more confusion. A significant number’ of money mar-ket analysts and some in public service believe that the discount rate is an iniportant tool through which the Federal Reserve exerts its influence overthe economy — particularly market interest rates. This view ap— pear-s to have gathered strength fi-om recent evidence that disrount rate changes have a statistically significant effect on market inter’est rates and from the
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