The Determinants of the Tax-Adjusted Real Interest Rate
- UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
- Stuart D. Allen, Professor (Creator)
- Institution
- The University of North Carolina at Greensboro (UNCG )
- Web Site: http://library.uncg.edu/
Abstract: A reduced-form real interest rate equation, derived from an IS-LM-AS model, is estimated to examine the relationship between real interest rates, the federal debt, supply shocks, monetary policy and other variables. The federal debt coefficient is consistently positive and significantly related to the real interest rate in the levels form of the equation. When the equation is first-differenced to eliminate any problem of autocorrelation and intercept instability, the evidence shows that both the federal debt and the supply shock coefficients are positive and significant. The coefficient estimates of the first-difference equations are stable and robust to the estimated period.
The Determinants of the Tax-Adjusted Real Interest Rate
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Additional Information
- Publication
- Journal of Macroeconomics, 14(1), Winter, 15-32.
- Language: English
- Date: 1992
- Keywords
- Interest, Tax, Finance, Economics, Federal debt, Monetary policy