IDEAS home Printed from https://ideas.repec.org/a/cje/issued/v24y1991i1p161-74.html
   My bibliography  Save this article

The Response of Short-term Interest Rates and Exchange Rates to Weekly Money Announcements

Author

Listed:
  • M. Aynul Hasan
  • Hassouna Moussa

Abstract

The efficiency hypothesis for financial markets requires that only the unexpected portion of the growth rate of money-supply announcements be significant in the determination of short-term changes in interest and exchange rates. In this paper, the authors argue that, in the face of an unstable monetary policy, old information should also affect interest and exchange rate changes. This does not constitute a refutation of the efficient market hypothesis, because the unstable policy requires rational economic agents to learn. The authors test the proposition using weekly Canadian financial data over the period 1976-82 and find evidence to support it.

Suggested Citation

  • M. Aynul Hasan & Hassouna Moussa, 1991. "The Response of Short-term Interest Rates and Exchange Rates to Weekly Money Announcements," Canadian Journal of Economics, Canadian Economics Association, vol. 24(1), pages 161-174, February.
    • Handle: RePEc:cje:issued:v:24:y:1991:i:1:p:161-74
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0008-4085%28199102%2924%3A1%3C161%3ATROSIR%3E2.0.CO%3B2-E
    Download Restriction: only available to JSTOR subscribers
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peter C. Liu, 1994. "Are Money Announcement Forecasts Rational?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(4), pages 475-483, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:24:y:1991:i:1:p:161-74. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Prof. Werner Antweiler (email available below). General contact details of provider: https://edirc.repec.org/data/ceaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.