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Crowding out, deficits, and interest rates: Reply


  • Richard Cebula


Spector and Van Cott argue that ‘... statistical significance of the relationship between interest rates and the deficit is irrelevant for the question of crowding out.’ This Reply in turn argues that studies of the impact of deficits upon interest rates may be very useful in determining whether (and perhaps how) crowding out occurs and that additional empirical analysis involving the interest sensitivity of commodity demand is necessary to then quantify the actual degree of crowding out. Copyright Kluwer Academic Publishers 1988

Suggested Citation

  • Richard Cebula, 1988. "Crowding out, deficits, and interest rates: Reply," Public Choice, Springer, vol. 58(1), pages 95-97, July.
  • Handle: RePEc:kap:pubcho:v:58:y:1988:i:1:p:95-97
    DOI: 10.1007/BF00183333

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    References listed on IDEAS

    1. Richard Cebula, 1987. "Federal deficits and the real rate of interest in the United States: A note," Public Choice, Springer, vol. 53(1), pages 97-100, January.
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    More about this item

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H69 - Public Economics - - National Budget, Deficit, and Debt - - - Other


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