Extending the open-economy loanable funds model, this paper finds that more government deficit as a percentage of GDP does not lead to a higher government bond yield. In addition, a higher real Treasury bill rate, a higher expected inflation rate, a higher EU government bond yield, or an...

This article extends the IS-MP-IA model (Romer, 2000) and applies the GARCH process (Engle, 1982, 2001) to study output variations in Slovenia. Equilibrium GDP in Slovenia is found to have a positive relationship with real depreciation and the world output and a negative relationship with the...