IDEAS home Printed from https://ideas.repec.org/a/mcb/jmoncb/v26y1994i4p894-902.html
   My bibliography  Save this article

A New Approach in Analyzing the Effect of Deficit Announcements on Interest Rates

Author

Listed:
  • Quigley, Michael Regan
  • Porter-Hudak, Susan

Abstract

Using alternative methods, the authors find less support than previous authors for significant interest rate responses to deficit announcements. The main results are that interest rates respond only 40 percent of the time to deficit announcements and when they do respond the impact is only temporary, lasting between one to six days and involving a 0.25 basis point response per percentage change in the deficit. Copyright 1994 by Ohio State University Press.

Suggested Citation

  • Quigley, Michael Regan & Porter-Hudak, Susan, 1994. "A New Approach in Analyzing the Effect of Deficit Announcements on Interest Rates," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(4), pages 894-902, November.
    • Handle: RePEc:mcb:jmoncb:v:26:y:1994:i:4:p:894-902
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0022-2879%28199411%2926%3A4%3C894%3AANAIAT%3E2.0.CO%3B2-%23&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kameda, Keigo, 2014. "Budget deficits, government debt, and long-term interest rates in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 32(C), pages 105-124.
    2. Becker, Torbjörn, 1995. "Government Debt and Private Consumption: Theory and Evidence," SSE/EFI Working Paper Series in Economics and Finance 71, Stockholm School of Economics.
    3. Bruno Ducoudré, 2005. "Fiscal policy and interest rates," Documents de Travail de l'OFCE 2005-08, Observatoire Francais des Conjonctures Economiques (OFCE).
    4. António Afonso & João Tovar Jalles & Mina Kazemi, 2019. "The Effects of Macroeconomic, Fiscal and Monetary Policy Announcements on Sovereign Bond Spreads: An Event Study from the EMU," Working Papers REM 2019/67, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    5. Douglas W. Elmendorf, "undated". "The Effect of Deficit-Reduction Laws on Real Interest Rates," Finance and Economics Discussion Series 1996-44, Board of Governors of the Federal Reserve System (U.S.), revised 10 Dec 2019.
    6. Mr. Serhan Cevik & João Tovar Jalles, 2020. "This Changes Everything: Climate Shocks and Sovereign Bonds," IMF Working Papers 2020/079, International Monetary Fund.
    7. Takahiro Hattori & Motoki Katano, 2020. "Do fiscal policy news shocks affect JGB yield? Evidence from COVID-19," Discussion papers ron334, Policy Research Institute, Ministry of Finance Japan.
    8. Afonso, António & Nunes, Ana Sofia, 2015. "Economic forecasts and sovereign yields," Economic Modelling, Elsevier, vol. 44(C), pages 319-326.
    9. Biswajit Maitra, 2017. "Monetary and fiscal factors in nominal interest rate variations in Sri Lanka under a deregulated regime," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 3(1), pages 1-17, December.
    10. Eric M. Engen & R. Glenn Hubbard, 2005. "Federal Government Debt and Interest Rates," NBER Chapters, in: NBER Macroeconomics Annual 2004, Volume 19, pages 83-160, National Bureau of Economic Research, Inc.
    11. repec:hal:spmain:info:hdl:2441/5221 is not listed on IDEAS
    12. Olcay Yucel Emir & Fatih Ozatay & Gulbin Sahinbeyoğlu, 2007. "Effects of US interest rates and news on the daily interest rates of a highly indebted emerging economy: evidence from Turkey," Applied Economics, Taylor & Francis Journals, vol. 39(3), pages 329-342.
    13. Bruno Ducoudre, 2008. "Structure par terme des taux d’intérêt et anticipations de la politique économique," Sciences Po publications info:hdl:2441/5221, Sciences Po.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mcb:jmoncb:v:26:y:1994:i:4:p:894-902. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.