The Deficit–Interest Rate Connection: an empirical assessment of the EU
Autor(a) principal: | |
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Data de Publicação: | 2004 |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10174/8409 |
Resumo: | The progressive deterioration of public finances in most developed countries, during the last two decades, prompted an extensive discussion on the effects of government deficits on the interest rate and, consequently, on employment and economic growth. The empirical literature, largely focused on the US, is far from conclusive. This paper examines this relationship in six core EU countries using non-causality tests, including the recently proposed LA-VAR test. The evidence suggests that, contrary to the conventional economic theory, no causal effect from the deficits to the interest rate can in general be found. On the contrary, the econometric tests highlight the preponderant negative consequences of high interest rates on the government total deficit. |
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The Deficit–Interest Rate Connection: an empirical assessment of the EUdeficitsinterest ratescausalityLA-VAR testEuropean UnionThe progressive deterioration of public finances in most developed countries, during the last two decades, prompted an extensive discussion on the effects of government deficits on the interest rate and, consequently, on employment and economic growth. The empirical literature, largely focused on the US, is far from conclusive. This paper examines this relationship in six core EU countries using non-causality tests, including the recently proposed LA-VAR test. The evidence suggests that, contrary to the conventional economic theory, no causal effect from the deficits to the interest rate can in general be found. On the contrary, the econometric tests highlight the preponderant negative consequences of high interest rates on the government total deficit.2013-04-03T11:29:12Z2013-04-032004-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articlehttp://hdl.handle.net/10174/8409http://hdl.handle.net/10174/8409engVieira, C. (2004),The Deficit–Interest Rate Connection:an empirical assessment of the EU, Documento de Trabalho nº 2004/05, Universidade de Évora, Departamento de Economia.24cvieira@uevora.ptE43, E62, H625_2004Department of Economics, University of ÉvoraVieira, Carlosinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-01-03T18:49:21Zoai:dspace.uevora.pt:10174/8409Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T01:02:40.194244Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
The Deficit–Interest Rate Connection: an empirical assessment of the EU |
title |
The Deficit–Interest Rate Connection: an empirical assessment of the EU |
spellingShingle |
The Deficit–Interest Rate Connection: an empirical assessment of the EU Vieira, Carlos deficits interest rates causality LA-VAR test European Union |
title_short |
The Deficit–Interest Rate Connection: an empirical assessment of the EU |
title_full |
The Deficit–Interest Rate Connection: an empirical assessment of the EU |
title_fullStr |
The Deficit–Interest Rate Connection: an empirical assessment of the EU |
title_full_unstemmed |
The Deficit–Interest Rate Connection: an empirical assessment of the EU |
title_sort |
The Deficit–Interest Rate Connection: an empirical assessment of the EU |
author |
Vieira, Carlos |
author_facet |
Vieira, Carlos |
author_role |
author |
dc.contributor.author.fl_str_mv |
Vieira, Carlos |
dc.subject.por.fl_str_mv |
deficits interest rates causality LA-VAR test European Union |
topic |
deficits interest rates causality LA-VAR test European Union |
description |
The progressive deterioration of public finances in most developed countries, during the last two decades, prompted an extensive discussion on the effects of government deficits on the interest rate and, consequently, on employment and economic growth. The empirical literature, largely focused on the US, is far from conclusive. This paper examines this relationship in six core EU countries using non-causality tests, including the recently proposed LA-VAR test. The evidence suggests that, contrary to the conventional economic theory, no causal effect from the deficits to the interest rate can in general be found. On the contrary, the econometric tests highlight the preponderant negative consequences of high interest rates on the government total deficit. |
publishDate |
2004 |
dc.date.none.fl_str_mv |
2004-01-01T00:00:00Z 2013-04-03T11:29:12Z 2013-04-03 |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10174/8409 http://hdl.handle.net/10174/8409 |
url |
http://hdl.handle.net/10174/8409 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Vieira, C. (2004),The Deficit–Interest Rate Connection:an empirical assessment of the EU, Documento de Trabalho nº 2004/05, Universidade de Évora, Departamento de Economia. 24 cvieira@uevora.pt E43, E62, H62 5_2004 Department of Economics, University of Évora |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.source.none.fl_str_mv |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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