This Note endeavors to illustrate the relevance of the impact of the budget deficit upon the interest rate to the issue of crowding out. It is argued that empirical studies of the impact of deficits upon interest rates may be very useful in det­ermining whether (and how) crowding out occurs,...

This study investigates the impact of federal budget deficits on both short-term and long­-term interest rates from 1971 to 1984 within an open IS-IM model that includes net international capital inflows. Two time periods are examined using quarterly data: 1971.4 to 1984.4 and 1979.4 to 1984.4....

Using quarterly data and dealing with the ex post real rates on three month U.S. Treasury bills and 20 year U.S. Treasury bonds, this empirical note has estimated an IS-LM based regression by 2SLS. The results indicate that the budget deficit raises the slope of the yield curve. Furthermore, to...

Evans has argued that the federal budget deficit in the United States does not influence the real rate of interest. Indeed, Evans (1985, p. 85) goes so far as to claim that “in over a century of U.S. history, large deficits have never been associated with high interest rate”. By contrast,...

This theoretical note elaborates upon why it is a myth that YTM is viewed as only a promised but not really earned interest rate. It addresses some misconceptions in Shirnani and Wilbratte (2009) on what, between YTM and RCY, is a true rate of return of a coupon bond, why YTM is not just a...

This paper seeks to empirically analyze the determinants of the business failure rate, i.e., the proportion of businesses that fail. This issue is of obvious importance due to its ramifications for resource allocation, especially that of financial capital, physical capital, and labor. This...

This note attempts to further elaborate why it is a myth that YTM is viewed as only a promised but not really earned interest rate. It addresses some misconceptions regarding what, between YTM and RCY, is a true rate of return of a coupon bond, why YTM is NOT just a “fictitious mathematical...