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An Empirical Analysis of the Impact of Federal Budget Deficits on Long-term Nominal Interest Rate Yields, 1973.2-1995.4, Using Alternative Expected Inflation Measures

Richard Cebula ()

MPRA Paper from University Library of Munich, Germany

Abstract: Using two alternative measures of expected inflation, this study investigates the impact of federal budget deficits on nominal long-term interest rate yields for the 1973.2-1995.4 period. Based on an open­ economy loanable funds framework, four instrumental variable esti­mates in first differences are provided. In all cases, the budget deficit is found to elevate the nominal long-term interest rate.

Keywords: federal budget deficits; nominal long-term interest rates; crowding out (search for similar items in EconPapers)
JEL-codes: E31 E43 E47 H62 (search for similar items in EconPapers)
Date: 1997-01-15
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Published in Review of Financial Economics 1.7(1998): pp. 55-64

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Related works:
Journal Article: An empirical analysis of the impact of federal budget deficits on long-term nominal interest rate yields, 1973.2-1995.4, using alternative expected inflation measures (1998) Downloads
Journal Article: An empirical analysis of the impact of federal budget deficits on long‐term nominal interest rate yields, 1973.2–1995.4, using alternative expected inflation measures (1998) Downloads
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