Kinoshita, Noriaki.
Government Debt and Long-Term Interest Rates Noriaki Kinoshita. [electronic resource] / Noriaki Kinoshita. - Washington, D.C. : International Monetary Fund, 2006. - 1 online resource (25 p.) - IMF Working Papers; Working Paper ; No. 06/63 . - IMF Working Papers; Working Paper ; No. 06/63 .
This paper examines the relationship between government debt and long-term interest rates. A dynamic general equilibrium model that incorporates debt nonneutrality is specified and solved, and numerical simulations using the model are undertaken. In addition, empirical evidence using panel data for 19 industrial countries is examined. The estimation provides some evidence supporting the theoretical predictions: the paper finds that the simulated and estimated interest rate effects of government debt tend to be small. However, an increase in government consumption and debt leads to a considerably larger effect. The paper also argues that, although the interest rate effects of pure crowding out may be limited, the economic impact of accumulating government debt cannot be ignored.
1451863233 : 15.00 USD
1018-5941
10.5089/9781451863239.001 doi
Birth Rate
Dynamic General Equilibrium Model
Equations
General Equilibrium Model
Long-Term Interest Rates
Simulation Results
Italy
United States
Government Debt and Long-Term Interest Rates Noriaki Kinoshita. [electronic resource] / Noriaki Kinoshita. - Washington, D.C. : International Monetary Fund, 2006. - 1 online resource (25 p.) - IMF Working Papers; Working Paper ; No. 06/63 . - IMF Working Papers; Working Paper ; No. 06/63 .
This paper examines the relationship between government debt and long-term interest rates. A dynamic general equilibrium model that incorporates debt nonneutrality is specified and solved, and numerical simulations using the model are undertaken. In addition, empirical evidence using panel data for 19 industrial countries is examined. The estimation provides some evidence supporting the theoretical predictions: the paper finds that the simulated and estimated interest rate effects of government debt tend to be small. However, an increase in government consumption and debt leads to a considerably larger effect. The paper also argues that, although the interest rate effects of pure crowding out may be limited, the economic impact of accumulating government debt cannot be ignored.
1451863233 : 15.00 USD
1018-5941
10.5089/9781451863239.001 doi
Birth Rate
Dynamic General Equilibrium Model
Equations
General Equilibrium Model
Long-Term Interest Rates
Simulation Results
Italy
United States