During the last several years, the issue of the effect of budget deficits on interest rates in the United States has attracted considerable attention. However, not only has the issue remained unsettled, but more recently has become even more clouded by conflicting evidence. For example, Cebula (1987
β¦ LIBER β¦
Federal deficits and the real rate of interest in the United States: A note
β Scribed by Richard J. Cebula
- Publisher
- Springer US
- Year
- 1987
- Tongue
- English
- Weight
- 193 KB
- Volume
- 53
- Category
- Article
- ISSN
- 0048-5829
No coin nor oath required. For personal study only.
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This study examines the long-term persistence in ex ante real interest rates. According to the long-run Fisher effect, ex ante real ratesΓthe difference between nominal rates and expected inΒ―ationΓshould be mean-reverting and have no unit root. Empirical evidence on mean reversion has been mixed and