Fiscal policy, trigger points and interest rates: Additional evidence from the U.S
We empirically investigate whether the relationship between interest rates and public deficits/debt may be nonlinear for the U.S. Using threshold estimation, we find evidence of level-dependent effects on interest rates, implying a significant effect of projected deficits and debt in the U.S. only if the deficit surpasses approximately 5% of GDP.
|Date of creation:||Oct 2011|
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