Please use this identifier to cite or link to this item: http://hdl.handle.net/2445/62325
Title: Fiscal policy and interest rates: the role of financial and economic integration
Author: Claeys, Peter Gunther
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
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, IR08/010
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)

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