The Influence of Fiscal and Monetary Policies on the Shape of the Yield Curve

Yoosoon Chang (yoosoon@iu.edu), Fabio Gómez-Rodríguez (fag221@lehigh.edu) and Christian Matthes
Authors registered in the RePEc Author Service: Steven N. Durlauf

No No 02/2024, Working Papers from Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School

Abstract: We investigate the influence of the U.S. government’s spending and taxation decisions, along with the monetary policy choices made by the Federal Reserve, on the dynamics of the nominal yield curve. Aggregate government spending moves the long end of the yield curve, whereas monetary policy and changes in taxation move the short end of the yield curve on impact. Disentangling different types of government spending, we find that only government consumption exerts a discernible influence on the short end of the yield curve. The effects are generally transient and disappear after one year.

Pages: 34 pages
Date: 2024-01
New Economics Papers: this item is included in nep-big and nep-lab
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https://hdl.handle.net/11250/3113608

Related works:
Working Paper: The Influence of Fiscal and Monetary Policies on the Shape of the Yield Curve (2023)
Working Paper: The Influence of Fiscal and Monetary Policies on the Shape of the Yield Curve (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:bny:wpaper:0129

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