Interest Rates and Government Debt: Are the Linkages Global Rather Than National?


Mark Scott Lutz ; Vito Tanzi

Publication Date:

January 1, 1991

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate


Given the increasing integration of financial markets, a better understanding of the effects of fiscal deficits and debt on real interest rates might be obtained by taking a global, rather than a national, perspective. The paper constructs aggregate flow and stock data (including GDP, fiscal deficits, government debt, and saving rates) and examines the empirical evidence of the global effect of fiscal policies on interest rates. The sensitivity of the results to the choice of deficit (central or general government), public debt (gross or net), and saving (gross or net), as well as the level and method of aggregation, is also examined.


Working Paper No. 1991/006



Publication Date:

January 1, 1991



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