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 ...
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4 comments:

  1. Todd ZorickNovember 30, 2015 at 6:57 PM

    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?

    ReplyDelete
    Replies
    1. Jason SmithNovember 30, 2015 at 8:14 PM

      https://en.wikipedia.org/wiki/Bank_Restriction_Act_1797

      Delete
    2. Todd ZorickNovember 30, 2015 at 11:41 PM

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

      Delete
    3. Jason SmithDecember 1, 2015 at 1:50 PM

      That was just a guess at the time :)

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

      Delete

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