The differing effects of pre- and post-1981 federal budget deficits on tax-adjusted real interest rates
- 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: This paper employs an estimating equation relating tax-adjusted real interest rates to deficits and other economic variables to examine the differing effects of pre- and post-1981 federal budget deficits on ex ante and ex post real tax-adjusted short-term interest rates over the period 1961:1-1992:2. The results for the 1961:1-1992:2 period, taking into account a shift in the linkage between the ratio of alternative measures of the deficit to potential GDP occurring in 1981:1, indicate that the ratio of both the NIPA deficit and the cyclically adjusted deficit to potential GDP have a significant effect on ex ante and ex post real tax-adjusted interest rates for the post-1981 period, but no significant effect before 1981.
The differing effects of pre- and post-1981 federal budget deficits on tax-adjusted real interest rates
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Created on 11/5/2010
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Additional Information
- Publication
- Applied Economics, 28(1), 45-53.
- Language: English
- Date: 1996
- Keywords
- Federal budget, Monetary policy, Deficits, Interest rates