Deficits and Real Interest Rates: A Note Extending the Hoelscher Model

This study adopts a loanable funds model to investigate the impact of budget deficits in the U.S. on long term real interest rates. The study investigates both ex post real 10 year Treasury note yields and ex post real 20 year Treasury bond yields. The study period runs from 1955 through 1987, using quarterly data. Two stage least squares estimations reveal that budget deficits did indeed raise these ex post real long term interest rate yields.

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Year of publication:	1990-02-05
Authors:	Cebula, Richard ; Scott, Gerald
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	budget deficits \| ex post real long term interest rates \| two stage least squares estimations

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Notes:	Published in The Indian Journal of Economics 4.71(1991): pp. 519-522
Classification:	E31 - Price Level; Inflation; Deflation ; E43 - Determination of Interest Rates; Term Structure Interest Rates ; G12 - Asset Pricing ; H62 - Deficit; Surplus
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011109118