Download or read book Anticipated Budget Deficits and the Term Structure of Interest Rates written by and published by . This book was released on 1984 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Anticipated Budget Deficits and the Term Structure of Interest Rates written by Daniel Valente Dantas and published by . This book was released on 1984 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the implications of government deficits in an overlapping generations consumption loan model with longterm assets. The only asset in the economy is a real consol issued by the government and serviced by lumpsum taxes on the young. We explore here the time path of short and longterm interest rates following the announcement of a future,transitory budget deficit under two alternative assumptions. In one case the deficit arises from transitory government spending, in the other case from a transfer.We show that a deficit policy ultimately raises longterm interest rates and lowers consol prices. The exact shape of the path of short-term rates depends on the source of the deficit and on the saving response to interestrates. In general, though, the term structure will be v-shaped. The interest of the model resides in the fact that the prices of longterm assets link the current generations to future disturbances. Because future disturbances affect future interest rates they affect the current value of debt outstanding and hence equilibrium short-term rates. The exact manner in which the disturbances are transmitted to prior periods depends on the extent to which consumers substitute easily across time or, on the contrary, have a strong preference for consumption smoothing.

Download or read book Fiscal Policy and Interest Rates in the European Union written by Klaas Knot and published by Edward Elgar Publishing. This book was released on 1996-01-01 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is an extensive study concerned with the potential effects of fiscal policy on financial markets in the EU. It takes into account the gradual liberalization of capital movements through Western Europe & the framework of the European Monetary System.

Download or read book Budget Deficit and Interest Rates written by José Nunes-Correia and published by . This book was released on 1993 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recoge: 1.Introduction - 2.Theoretical considerations - 3.Trends in long-term interest rates and budget deficits (1970-1990) - 4.The model - 5.Expected inflation and econometric issues - 6.Empirical evidence - 7.Conclusions.

Download or read book New Evidence on the Interest Rate Effects of Budget Deficits and Debt written by Thomas Laubach and published by . This book was released on 2003 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Federal Government Deficits and the Term Structure of Interest Rates in the United States written by and published by . This book was released on 1990 with total page 944 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Fiscal Policy and the Term Structure of Interest Rates written by Qiang Dai and published by . This book was released on 2005 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: Macroeconomists want to understand the effects of fiscal policy on interest rates, while financial economists look for the factors that drive the dynamics of the yield curve. To shed light on both issues, we present an empirical macro-finance model that combines a no-arbitrage affine term structure model with a set of structural restrictions that allow us to identify fiscal policy shocks, and trace the effects of these shocks on the prices of bonds of different maturities. Compared to a standard VAR, this approach has the advantage of incorporating the information embedded in a large cross-section of bond prices. Moreover, the pricing equations provide new ways to assess the model's ability to capture risk preferences and expectations. Our results suggest that (i) government deficits affect long term interest rates: a one percentage point increase in the deficit to GDP ratio, lasting for 3 years, will eventually increase the 10-year rate by 40--50 basis points; (ii) this increase is partly due to higher expected spot rates, and partly due to higher risk premia on long term bonds; and (iii) the fiscal policy shocks account for up to 12% of the variance of forecast errors in bond yields.

Download or read book The Effects of Government Deficits written by Charles E. Dumas and published by . This book was released on 1985 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Determinants and Effects of Change in Interest Rates written by Rudiger Dornbusch and published by . This book was released on 1979 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Long term Tendencies in Budget Deficits and Debt written by Paul R. Masson and published by . This book was released on 1995 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Implications of Government Deficits for Interest Rates Equity Returns and Corporate Financing written by Benjamin M. Friedman and published by . This book was released on 1984 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: How the financing of government budget deficits affects the structure of expected asset returns depends on assets' relative substitutabilities in investors' aggregate portfolio, and these substitutabilities in turn depend on how investors perceive the risks associated with the respective assets' returns. The empirical results reported in this paper, based on three different ways of representing investors' risk perceptions, consistently indicate that government deficit financing raises expected debt returns relative to expectedequity returns, regardless of the maturity of the government's financing. More specifically, financing government deficits by issuing short-term debt lowers the return on long-term debt, and lowers the return on equity by even more, relative to the return on short-term debt. Financing deficits by issuing long-term debt raises the return on long-term debt, but lowers the return on equity, again in comparison to the return on short-term debt. The indicated magnitudes of these effects differ according to the method used to represent investors' risk perceptions, but the qualitative results are consistent throughout. Moreover, many of the indicated magnitudes are large enough to matter economically. These results imply that continuing large government deficits at full employment lead to market incentives for individual business corporations to emphasize reliance on equity (including retentions), and reduce reliance on debt, in comparison with the composition of corporate financing that would prevail in the absence of the need to finance the government budget deficit

Download or read book Interest Rates and Budget Deficits written by Kanhaya Lal Gupta and published by London : Routledge. This book was released on 1996-01 with total page 262 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is widespread belief that the high interest rates of the 1980s and 1990s in the developed world have been caused by high budget deficits. Yet, there is no conclusive evidence to support such a belief. This book systematically examines this and other questions relating to the behaviour of real interest rates in eleven developed countries. The results show that generalizations across the countries can be hazardous and strongly suggests that factors specific to individual countries are still of vital importance.

Download or read book Fiscal Deficits Public Debt and Sovereign Bond Yields written by Mr.Manmohan S. Kumar and published by International Monetary Fund. This book was released on 2010-08-01 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: The recent sharp increase in fiscal deficits and government debt in many countries raises questions regarding their impact on long-term sovereign bond yields. While economic theory suggests that this impact is likely to be adverse, empirical results have been less clear cut, have generally ignored nonlinear effects of deficits and debt through some other key determinants of yields, and have been mostly confined to advanced economies. This paper reexamines the impact of fiscal deficits and public debt on long-term interest rates during 1980 - 2008, taking into account a wide range of country-specific factors, for a panel of 31 advanced and emerging market economies. It finds that higher deficits and public debt lead to a significant increase in long-term interest rates, with the precise magnitude dependent on initial fiscal, institutional and other structural conditions, as well as spillovers from global financial markets. Taking into account these factors suggests that large fiscal deficits and public debts are likely to put substantial upward pressures on sovereign bond yields in many advanced economies over the medium term.

Download or read book Effects of Federal Budget Deficits on Interest Rates and the Composition of Domestic Output written by James R. Barth and published by . This book was released on 1989 with total page 87 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Budget Deficits and Long term Interest Rates written by Yeoh Boon Siew and published by . This book was released on 1998 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Effect of Budget Deficits on Interest Rates written by Ilonka Lambeck and published by . This book was released on 1996 with total page 106 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Budget Deficits Debt Service and Real Interest Rates in the United States written by and published by . This book was released on 1991 with total page 6 pages. Available in PDF, EPUB and Kindle. Book excerpt: