MONEY SUPPLY ANNOUNCEMENTS - A RETROSPECTIVE

This article examines the behavior, significance, and subsample consistency of the impact of unexpected announcements of money supply growth on the entire yield curve over a nearly 12-year period, 1977-1988. The results indicate that there is clear evidence of an announcement effect over the entire period, but this effect differs in importance and significance within subperiods and across time. The relative coefficient estimates and their significance, however, appear stable and indicative of a rational economic response by market participants throughout the period of study. © 1991.