tag:blogger.com,1999:blog-6837159629100463303.post463894994831073589..comments2023-06-18T01:25:08.748-07:00Comments on Information Transfer Economics: The long and short of interest ratesJason Smithhttp://www.blogger.com/profile/12680061127040420047noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6837159629100463303.post-84208189439266076962016-02-06T11:32:31.314-08:002016-02-06T11:32:31.314-08:00Ah. I see.Ah. I see.Mhttps://www.blogger.com/profile/17351584119181245920noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-28440661910572559572016-02-06T11:02:15.805-08:002016-02-06T11:02:15.805-08:00But it is easy enough to show both ... I will upda...But it is easy enough to show both ... I will update.Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-67611004112737927532016-02-06T11:01:02.929-08:002016-02-06T11:01:02.929-08:00The main reason is that the short rate would just ...The main reason is that the short rate would just look like zero, smashed against the axis. On a log scale, you can see the correlation with 1/MB better that I discuss here:<br /><br /><a href="http://informationtransfereconomics.blogspot.com/2015/08/explicit-implicit-models.html" rel="nofollow">http://informationtransfereconomics.blogspot.com/2015/08/explicit-implicit-models.html</a><br /><br />And since it is a model of both interest rates:<br /><br />log(r) = c log(NGDP/M) - b<br /><br />with<br /><br />c = 3.02<br />b = 11.7<br /><br />and M = MB for short rates and M = M0 (MB minus reserves) for long rates, I like to show both on the same graph.Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-35749399517693942872016-02-06T07:37:54.664-08:002016-02-06T07:37:54.664-08:00May I ask why you are using a logarithmic scale?May I ask why you are using a logarithmic scale?Mhttps://www.blogger.com/profile/17351584119181245920noreply@blogger.com