The Effects of Government Budget Deficits on the Interest Rates: A Case Study of a Small Open Economy
This paper investigates the relationship between interest rates and government budget deficits in Pakistan over the period from 1970: I to 1991: IV. The results reveal that government budget deficits do not exert significant influence on nominal or real interest rates. These findings do not lend support to the « Crowding-Out » hypothesis winch suggests an inverse relationship between government budget deficits and rate of interest.
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Volume (Year): 47 (1994)
Issue (Month): 1 ()
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