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The policy anticipation hypothesis and the expected inflation hypothesis: Some new evidence using index linked bonds

Research output: Contribution to Journal/MagazineJournal articlepeer-review

<mark>Journal publication date</mark>10/1990
<mark>Journal</mark>Economics Letters
Issue number2
Number of pages5
Pages (from-to)121-125
Publication StatusPublished
<mark>Original language</mark>English


Using price index linked and conventional bonds issued by the UK Government, estimates of expectedinflation and the expected real interest rate are derived. These estimates are employed to investigate the relationship between components of the nominal interest rate and surprise monetary change. The empirical results support the expectedinflationhypothesis rather than the policyanticipationhypothesis.