Money substitutes and interest rate determination: the Australian case
Keywords:Australia, money substitutes, interest rates, liquidity
The paper describes a test carried out to asses the significance of money substitutes in interest rate determination in Australia in the years 1953-1963. The test involved a comparison of four simple alternative hypotheses where four independent variables correspond to four alternative indices of liquidity. According to the results, the author infers that making an explicit allowance for money substitutes does not contribute to the explanation of the behaviour of the rate of interest, parallelling the results obtained from other studies.
JEL: E42, E43