Rising public debt and the short-term interest rates: Is there a link?

Leon Podkaminer

Bank i Kredyt, 2022, vol. 53, issue 3, 325-340

Abstract: ARDL-Bounds models for the European countries, the USA and Japan suggest that increasing public debts may have been of minor importance as determinants of short-term real interest rates. Moreover, the effects in question appear to be negative almost everywhere. Rising public debts seem to have lowered the short-term interest rates, if only rather marginally in most cases. The lingering opinion that fiscal deficits drive up interest rates finds no convincing confirmation in the data.

Keywords: crowding out; public debt; short-term interest rates; ARDL-B (search for similar items in EconPapers)
JEL-codes: E43 E62 H62 (search for similar items in EconPapers)
Date: 2022
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