MONETARY REGIME CHANGES AND THE BEHAVIOR OF EX ANTE REAL INTEREST-RATES - A MULTICOUNTRY STUDY

Previous research has found that U.S. monetary regime changes are related to changes in the behavior of ex ante real interest rates. This paper examines monetary regime changes in other countries to test whether changes in expected real interest rates are related to monetary regime changes in a systematic manner. The results show that while real rates have not been constant across monetary regimes, the characteristics of the real rate process shifts differ across countries. This evidence is consistent with theories that predict the neutrality of monetary regime changes with respect to real variables. © 1990.