The spread between long-term and short-term interest rates is an excellent leading indicator of business-cycle fluctuations in Austria and Germany. A negative spread signals a slowdown in future growth; a positive spread indicates improved growth prospects. This finding may serve to...

Since the mid-seventies fiscal policy in many OECD countries has been faced with the problem of rapidly rising public debt. The dynamics of public debt can be traced to two factors: first, the spread between the interest rate and the growth rate of the economy, and second, the primary budget...