Claeys, Peter; Moreno, Rosina; Suriñach, Jordi - In: Economic Modelling 29 (2012) 1, pp. 48-59
It is commonly believed that higher budget deficits raise interest rates. However, these crowding out effects of … interest rate differentials are offset due to financial integration. This paper tests crowding out, and measures the degree of … integration of government bond markets, using spatial modelling techniques. Our main finding is that the crowding out effect of …