I'm having trouble distinguishing which of the interest rates,either nominal or real, central banks are able to control directly.Expanding on that, is there a difference between monetary policy'simpact on short and long-run interest rates? I understand thatmonetary policy can control short-run nominal interest rates, butis the same true for long-run nominal interest rates? Do centralbanks have any control over real interest rates or only nominal? Iam so confused.
Essentially, what are the differences between these four typesof interest rates:
1. Short-Run Nominal Interest Rates
2. Long-Run Nominal Interest Rates
3. Short-Run Real Interest Rates
4. Long-Run Real Interest Rates
And which are controlled by monetary policy?
If this seems all over the place and incomprehensible, then Iwould appreciate a general explanation of monetary policy withrespect to nominal and real interest rates if possible!
