Government budget deficits, nominal and ex ante real long-term interest rates in the U.K., 1960:1-1990:2.: An article from: Atlantic Economic Journal

This digital document is an article from Atlantic Economic Journal, published by Atlantic Economic Society on June 1, 1993. The length of the article is 3475 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

From the author: This paper explores the impact of government budget deficits on the U.K. nominal and ex ante real long-term interest rates over the period from 1960:1 to 1990:2 utilizing an open and closed economy IS-LM model. An open economy IS-LM model indicates that nominal and ex ante real long-term interest rates are affected by the expected rate of inflation, the real money stock, the real government budget deficit, the real government spending, and the real balance of trade. The evidence presented suggests that increases in the U.K. budget deficits do contribute significantly to increases in nominal and ex ante real long-term interest rates. This implies that rising nominal and ex ante real long-term interest rates, as a result of high government budget deficits, would crowd out private investment and deter capital formation and long-term economic growth. (JEL H62)

Citation Details
Title: Government budget deficits, nominal and ex ante real long-term interest rates in the U.K., 1960:1-1990:2.
Author: Amer K. Al-Saji
Publication:Atlantic Economic Journal (Refereed)
Date: June 1, 1993
Publisher: Atlantic Economic Society
Volume: v21 Issue: n2 Page: p71(7)

Distributed by Thomson Gale