Re: Deficit / interest rate comparison?

[Alan G Isaac <aisaac@xxxxxxxxxxxx>]

On Mon, 8 Apr 2002 18:45:54 -0700 (PDT) James Baird <jlbaird3@xxxxxxxxx> wrote:
> I was just wondering if anyone has any numbers, or can
> at least point me to any numbers, that realte
> long-term interest rates to the level of government
> deficit spending.  My macro textbook assumes, as a
> matter of theory, that the "crowding out" mechanism
> will cause there to be a lockstep relationship, but
> has anyone actually done the empirical research?


Check the references section of

William Gissy
Net Treasury Borrowing and Interest-Rate Changes
Journal of Economics and Finance * Volume 23 * Number 1 * Spring 1999 *
Pages 23-29

and

Michael M. Hutchison
The real interest rate/budget deficit link: international evidence, 1973-82
Working Papers in Applied Economic Theory 84-02 / Federal Reserve Bank of San Francisco

Cheers,
Alan Isaac