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dc.contributor.authorArdagna, Silvia
dc.contributor.authorCaselli, Francesco
dc.contributor.authorLane, Timothy
dc.date.accessioned2009-02-09T18:29:06Z
dc.date.issued2007
dc.identifier.citationArdagna, Silvia, Francesco Caselli, and Timothy Lane. 2006. Fiscal Discipline and the Cost of Public Debt Service: Some Estimates for OECD Countries. The B.E. Journal of Macroeconomics 7(1).en
dc.identifier.issn1555-0486en
dc.identifier.urihttp://nrs.harvard.edu/urn-3:HUL.InstRepos:2579739
dc.description.abstractWe use a panel of 16 OECD countries over several decades to investigate the effects of government debts and deficits on long-term interest rates. In simple static specifications, a one-percentage-point increase in the primary deficit relative to GDP increases contemporaneous long-term interest rates by about 10 basis points. In a vector autoregression (VAR), the same shock leads to a cumulative increase of almost 150 basis points after 10 years. The effect of debt on interest rates is non-linear: only for countries with above-average levels of debt does an increase in debt affect the interest rate. World fiscal policy is also important: an increase in total OECD-government borrowing increases each country's interest rates. However, domestic fiscal policy continues to affect domestic interest rates even after controlling for worldwide debts and deficits.en
dc.description.sponsorshipEconomicsen
dc.language.isoen_USen
dc.publisherTHe Berkeley Electronic Pressen
dc.relation.isversionofhttp://dx.doi.org/10.2202/1935-1690.1417en
dash.licenseLAA
dc.titleFiscal Discipline and the Cost of Public Debt Service: Some Estimates for OECD Countriesen
dc.typeJournal Article
dc.description.versionAccepted Manuscript
dc.relation.journalThe B.E. Journal of Macroeconomicsen
dash.depositing.authorArdagna, Silvia
dc.identifier.doi10.2202/1935-1690.1417*
dash.contributor.affiliatedArdagna, Silvia


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