Do Federal Deficits Really Matter?
This paper reviews competing views regarding interest rates and other economic effects of federal deficits. It discusses the findings of several empirical studies that have analyzed these relationships. The main points ofthe paper are that: (a) the con-cept of the deficit is ambiguous because not all deficits have the same economic effects, and (b) by slightly modifying existing studies, one is able to produce empirical evidence showing that deficits or debt do indeed raise interest rates and otherwise affect economic activity in ways consistent with the conven-tional view. Copyright 1984 Western Economic Association International.
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Volume (Year): 3 (1984)
Issue (Month): 1 (09)
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