Cebula, Richard and Koch, James (1988): An Empirical Note on Deficits, Interest Rates, and International Capital Flows. Published in: The Quarterly Review of Economics and Business , Vol. 29, No. 3 (28 October 1989): pp. 121-127.
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Abstract
The purpose of this study is to examine the impact of federal budget deficits upon the nominal long term rate of interest in the United States when, in addition to the usual potential interest-rate-influencing factors such as monetary policy, short term interest rates, the budget deficit, and inflationary expectations, net international capital flows into the United States have been accounted for. Using three alternative measures of long term interest rate yields, the 2SLS estimations provided in this note provide strong empirical evidence that federal budget deficits in the United States exercise a positive and statistically significant influence over longer-term rates of interest despite the influence of net capital inflows.
Item Type: | MPRA Paper |
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Original Title: | An Empirical Note on Deficits, Interest Rates, and International Capital Flows |
English Title: | An Empirical Note on Deficits, Interest rates, and International Capital Flows |
Language: | English |
Keywords: | long term nominal interest rates; budget deficits; net international capital inflows |
Subjects: | E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E43 - Interest Rates: Determination, Term Structure, and Effects F - International Economics > F3 - International Finance > F32 - Current Account Adjustment ; Short-Term Capital Movements H - Public Economics > H6 - National Budget, Deficit, and Debt > H61 - Budget ; Budget Systems |
Item ID: | 50165 |
Depositing User: | Richard Cebula |
Date Deposited: | 25 Sep 2013 03:01 |
Last Modified: | 28 Sep 2019 22:57 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/50165 |