Template-Type:ReDIF-Paper 1.0  
Title: The Information Content of German Discount Rate Changes
Author-Name: Manfred J. M Neumann
Author-Name: Jens Weidmann
Classification-JEL:E43, E52
Keywords: Discount rate, announcement effects, Deutsche Bundesbank
Abstract: Discount rate changes always receive considerable attention in financial markets and a bulk of empirical
	papers shows that asset prices react to them. However, among researcher, there is no consensus yet about why markets
	respond to such changes. This paper analyses this issue for the Bundesbank's discount rate changes after 1979. The
	empirical results indicate that the overnight rate reacts to changes in the discount rate to the extent that they are
	unanticipated. In contrast, the response to anticipated changes in the discount rate is much smaller and insignificant.
	Moreover, the response of the overnight rate cannot be attributed to a direct "borrowing cost effect", but exclusively to
	announcement effects. 
Length: pages
Creation-Date: 1996-07
Revision-Date: 
Handle: RePEc:bon:bonsfb:367