The emergence of record current-account and fiscal deficits in the United States during the 1980s draws increasing attention to what has become known as the "twin deficit" problem. Conventional wisdom is that a shift to larger government deficits entails a decline in government saving and...

A small but growing body of literature searches for evidence of non-Keynesian effects of fiscal contractions. That is, some evidence exists that large fiscal contractions stimulate short-run economic activity. This article continues that research effort by systematically examining the effects...

Conventional wisdom suggests that higher government fiscal deficits cause higher (long-term) interest rates. Much empirical work-generally standard ordinary least squares (OLS) regression analysis-has examined this issue and has produced mixed findings. Even if these standard OLS studies...