Revisiting the Relationship Between Debt and Long-Term Interest Rates: Working Paper 2024-05

Jeffrey Schafer

No 60314, Working Papers from Congressional Budget Office

Abstract: In forming its long-run projections of the interest rate on 10-year Treasury notes, the Congressional Budget Office estimates that a 1 percentage-point increase in the projected ratio of debt to gross domestic product raises average long-run interest rates by 2 basis points (bps). The agency refers to that estimated relationship as the debt sensitivity of interest rates (DSIR). Here we extend the sample used in a previous CBO working paper to empirically estimate the DSIR and explore the relationship’s stability over time. Extending the sample through 2023 yields an

JEL-codes: E43 E60 E62 H60 (search for similar items in EconPapers)
Date: 2024-12-20
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cbo.gov/system/files/2024-12/60314-DSIR-WP.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cbo:wpaper:60314

Access Statistics for this paper

More papers in Working Papers from Congressional Budget Office Contact information at EDIRC.
Bibliographic data for series maintained by ().