The Impact of the Federal Budget Deficit on the Nominal Interest Rate Yield on US Treasury Notes, 1979-2001

Richard Cebula ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study empirically examines the impact of the federal government budget on the nominal interest rate yield on US Treasury notes over the 1979-2001 period. In a system that includes the monetary base, the civilian labor force unemployment rate, the ex ante real 52 week Treasury bill rate, and the percentage growth rate of the S&P 500 stock index, Error-Corrections Model (ECM) estimation finds that the total federal budget deficit acted to increase the nominal interest rate yield on seven year US Treasury notes over the study period.

Keywords: federal budget deficit; error-correction model; interest rate yield on seven-year Treasury notes (search for similar items in EconPapers)
JEL-codes: E4 E43 E62 G1 (search for similar items in EconPapers)
Date: 2003-09-08
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Citations: View citations in EconPapers (2)

Published in The ICFAI Journal of Applied Economics 2.3(2004): pp. 7-18

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Journal Article: The Impact of the Federal Budget Deficit on the Nominal Interest Rate Yield on U.S. Treasury Notes, 1979-2001 (2004)
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