Fiscal discipline and the cost of public debt service : some estimates for OECD countries / Silvia Ardagna, Francesco Caselli, Timothy Lane Ardagna, Silvia

User activity

Share to:
View the summary of this work
Author
Ardagna, Silvia
Subjects
Fiscal policy - OECD countries.; Government deficit - public debt - long-term interest rates.; Debts, Public - OECD countries.
Summary
"We use a panel of 16 OECD countries over several decades to investigate the effects of government debts and deficits on long-term interest rates. In simple static specifications, a one-percentage-point increase in the primary deficit relative to GDP increases contemporaneous long-term interest rates by about 10 basis points. In a vector autoregression (VAR), the same shock leads to a cumulative increase of almost 150 basis points after 10 years. The effect of debt on interest rates is non-linear: only for countries with above-average levels of debt does an increase in debt affect the interest rate. World fiscal policy is also important: an increase in total OECD-government borrowing increases each country's interest rates. However, domestic fiscal policy continues to affect domestic interest rates even after controlling for worldwide debts and deficits."
Bookmark
http://trove.nla.gov.au/work/3257040
Work ID
3257040

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this work

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this work

Add a comment


Show comments and reviews from Amazon users