Federal Government Budget Deficits and Real Long-Term Interest Rates in the United States: An Alternative Perspective
The empirical results obtained in this study suggest that, in the United States, a rise in the real long-term rate of interest elicits a rise in the federal government budget deficit. This impact of the real long-term interest rate appears to arise because of the negative effect that higher real interest rates exercise on the unemployment rate. The findings obtained in this study imply that a monetary policy that directly or indirectly raises real long-term interest rates may raise the government budget deficit as well.
Year of publication: |
1997
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Authors: | Cebula, Richard J. ; Saltz, Ira S. |
Published in: |
Swiss Journal of Economics and Statistics (SJES). - Schweizerische Gesellschaft für Volkswirtschaft und Statistik / Société Suisse d"Économie et de Statistique - SGVS/SSES, ISSN 0303-9692. - Vol. 133.1997, I, p. 19-27
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Publisher: |
Schweizerische Gesellschaft für Volkswirtschaft und Statistik / Société Suisse d"Économie et de Statistique - SGVS/SSES |
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