Journal Article

World public debt and real interest rates

Rt Ford and D Laxton

in Oxford Review of Economic Policy

Published on behalf of The Oxford Review of Economic Policy Ltd

Volume 15, issue 2, pages 77-94
Published in print June 1999 | ISSN: 0266-903X
Published online June 1999 | e-ISSN: 1460-2121 | DOI: https://dx.doi.org/10.1093/oxrep/15.2.77
World public debt and real interest rates

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  • Economic Development and Growth
  • Public Economics
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Real interest rates appear to have risen in virtually all industrialized countries in the 1980s and 1990s relative to levels that prevailed in earlier decades. There is concern that this may reflect higher public debt, which is crowding out private-sector activity. There has also been increasing international capital market integration, implying that interest rates in any country may be sensitive to global fiscal developments. This paper estimates the effects of such fiscal developments on real interest rates in nine industrial countries. The results imply that the increase in OECD-wide government debt since the late 1970s was a major factor in the rise in real interest rates.

Journal Article.  0 words. 

Subjects: Economic Development and Growth ; Public Economics ; Political Economy ; Public Policy

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