A New Approach in Analyzing the Effect of Deficit Announcements on Interest Rates

Michael Regan Quigley and Susan Porter-Hudak

Journal of Money, Credit and Banking, 1994, vol. 26, issue 4, 894-902

Abstract: Using alternative methods, the authors find less support than previous authors for significant interest rate responses to deficit announcements. The main results are that interest rates respond only 40 percent of the time to deficit announcements and when they do respond the impact is only temporary, lasting between one to six days and involving a 0.25 basis point response per percentage change in the deficit. Copyright 1994 by Ohio State University Press.

Date: 1994
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