IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Emerging Markets’ Deficits, Privatization, and Interest Rates

Listed author(s):
  • Walker, David A.


    (The McDonough School of Business, Georgetown University, Washington)

Registered author(s):

    Emerging markets face unique issues as they try to restrain their twin deficits, privatize their economies, and control interest rates and infl ation. This study provides a four-equation model, estimated across 31 emerging market countries, to identify the exogenous and policy factors that affect these variables. The effects on interest rates from changes in fiscal deficits, trade deficits, and privatization are statistically signifi cant. Policy makers can reduce interest rates by pursuing three goals: reducing fi scal defi cits, reducing trade defi cits, and increasing levels of privatization. The reduced form of the interest rate equation under stable conditions has a negative coeffi cient for the change in privatization and positive coeffi cients for both changes in the fi scal and trade defi cits. Therefore, interest rates are expected to decline with an increase in privatization and a decrease in either the fi scal or the trade defi cit, or both. The greatest impact results from an emerging market country reducing its fi scal deficit.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    File Function: Full text
    Download Restriction: no

    Article provided by Camera di Commercio Industria Artigianato Agricoltura di Genova in its journal Economia Internazionale / International Economics.

    Volume (Year): 60 (2007)
    Issue (Month): 1 ()
    Pages: 83-109

    in new window

    Handle: RePEc:ris:ecoint:0067
    Contact details of provider: Postal:
    Via Garibaldi 4, 16124 Genova, Italy

    Phone: +39 010 27041
    Fax: +39 010 2704222
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:ris:ecoint:0067. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Angela Procopio)

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.