Interest Rates and Budget Deficits: A Study of the Advanced Economies (Routledge Studies in the Modern World Economy, 1)

There is widespread belief that the high interest rates of the 1980s and 1990s in the developed world have been caused by high budget deficits. Yet, there is no conclusive evidence to support such a belief. This book systematically examines this and other questions relating to the behaviour of real interest rates in eleven developed countries. The results show that generalizations across the countries can be hazardous and strongly suggests that factors specific to individual countries are still of vital importance.

Despite no conclusive evidence, there is widespread belief that the high interest rates of the 1980s and 1990s in the developed world have been caused by high budget deficits.
Interest Rates and Budget Deficit systematically examines this and other questions relating to the behavior of real interest rates in eleven developed countries. The results show that generalizations across the countries can be hazardous and strongly suggests that factors specific to individual countries are still of vital importance.

1. Introduction -- 2. Problems Of Measuring Ex-ante Real Interest Rates -- 3. Estimates And Behaviour Of Ex-ante Real Interest Rates -- 4. Interest Rates, Inflation And Taxes -- 5. On The Exogeneity Of The Real Interest Rate -- 6. Budget Deficits And Interest Rates: Theory -- 7. Budget Deficits And Interest Rates: The Evidence -- 8. Some Lessons. Kanhaya L. Gupta And Bakhtiar Moazzami. Includes Bibliographical References (pages 250-256) And Index. Examining the behaviour of real interest rates in eleven developed countries, this work sets out to show that generalizations can be hazardous and factors specific to individual countries are still of vital importance.