proem

Economics, Econometrics and Finance

4 years ago

Budget deficits drive up U.S. Treasury interest rates, impacting economy.

Current Evidence on the Impact of Budget Deficits on the Nominal Interest Rate Yield on Intermediate-term Debt Issues of the U.S. Treasury: An Analysis with Robustness Tests

Richard J. Cebula

Paper Summary

Economics, Econometrics and Finance

4 years ago

Budget deficits drive up U.S. Treasury interest rates, impacting economy.

MPRA Paper

Current Evidence on the Impact of Budget Deficits on the Nominal Interest Rate Yield on Intermediate-term Debt Issues of the U.S. Treasury: An Analysis with Robustness Tests

Richard J. Cebula

Paper Summary

The budget deficit of the U.S. government has a positive impact on the interest rates for ten-year Treasury notes. This impact remains even when considering other factors like inflation and economic growth. The study used data from 1971 to 2012, including periods of quantitative easing by the Federal Reserve.