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Interest rate risk and other determinants of post WWII U.S. government debt/GDP dynamics

Author

Listed:
  • George J. Hall

    (Department of Economics, Brandeis University)

  • Thomas J. Sargent

    (Department of Economics, New York University)

Abstract

This paper uses a sequence of government budget constraints to motivate estimates of returns on the U.S. Federal government debt. Our estimates differ conceptually and quantitatively from the interest payments reported by the U.S. government. We use our estimates to account for contributions to the evolution of the debt-GDP ratio made by inflation, growth, and nominal returns paid on debts of different maturities.

Suggested Citation

  • George J. Hall & Thomas J. Sargent, 2010. "Interest rate risk and other determinants of post WWII U.S. government debt/GDP dynamics," Working Papers 01, Brandeis University, Department of Economics and International Business School.
    • Handle: RePEc:brd:wpaper:01
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Holding period returns; capital gains; inflation; growth; debt- GDP ratio; government budget constraint;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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