Monday, November 30, 2015

300 years of interest rates

In this post I just did a bit of educated guessing about where the monetary regime breaks should go over the past 300+ years in the UK (time series from here). Turns out all but one (in 1790) roughly correspond to points where interest rates changed from being/not being "pegged" (see here, here, and here):



I plan on doing a future post where I see if I can make this into a more scientific proposition rather than some vague empirical eyeballing ...

4 comments:

  1. Yes please! I find historical data comparisons extremely interesting from the point of view of validating an economic model. Much more interesting than beating up on Scott Sumner or trolling Cochrane...

    Hmm 1790- war expenditures from the American war of independence?

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    Replies
    1. So it's likely another form of going off of a currency peg (gold standard)? Interesting.

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    2. That was just a guess at the time :)

      I'd like figure out the divisions in a more robust way ...

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Also, try to avoid the use of dollar signs as they interfere with my setup of mathjax. I left it set up that way because I think this is funny for an economics blog. You can use € or £ instead.