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http://hdl.handle.net/2445/62325
Title: | Fiscal policy and interest rates: the role of financial and economic integration |
Author: | Claeys, Peter Moreno Serrano, Rosina Suriñach Caralt, Jordi |
Keywords: | Política fiscal Macroeconomia Cicle de vida del producte Deute públic Anàlisi d'impacte econòmic Inversions Fiscal policy Macroeconomics Product life cycle Public debt Economic impact analysis Investments |
Issue Date: | 2008 |
Publisher: | Universitat de Barcelona. Institut de Recerca en Economia Aplicada Regional i Pública |
Series/Report no: | [WP E-IR08/10] |
Abstract: | It is commonly believed that a fiscal expansion raises interest rates. However, these crowding out effects of deficits have been found to be small or non-existent. One explanation is that financial integration offsets interest rate differentials on globalised bond markets. This paper measures the degree of integration of government bond markets, using spatial modelling techniques to take this spillover on financial markets into account. Our main finding is that the crowding out effect on domestic interest rates is significant, but is reduced by spillover across borders. This spillover is important in major crises or in periods of coordinated policy actions. This result is generally robust to various measures of cross-country linkages. We find spillover to be much stronger among EU countries. |
Note: | Reproducció del document publicat a: http://www.ub.edu/irea/working_papers/2008/200810.pdf |
It is part of: | IREA – Working Papers, 2008, IR08/10 |
URI: | http://hdl.handle.net/2445/62325 |
ISSN: | 2014-1254 |
Appears in Collections: | Documents de treball (Institut de Recerca en Economia Aplicada Regional i Pública (IREA)) Documents de treball / Informes (Econometria, Estadística i Economia Aplicada) |
Files in This Item:
File | Description | Size | Format | |
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IR08-010_Claeys.pdf | 171.07 kB | Adobe PDF | View/Open |
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