{
  "title": "Budget Deficits and Interest Rates: A Fresh Perspective",
  "publication": "IMF Working Papers, February 1, 2008",
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  "summary": "We extend the literature on budget deficits and interest rates in three ways: we examine both advanced and emerging economies and for the first time a large emerging market panel; explore interactions to explain some of the heterogeneity in the literature; and apply system GMM.",
  "sections": [
    {
      "heading": "Extensions to the literature",
      "content": "- Examine both advanced and emerging economies, including for the first time a large emerging market panel.\n- Explore interactions to explain heterogeneity in previous findings.\n- Apply system GMM estimation."
    },
    {
      "heading": "Main findings",
      "content": "- There is overall a highly significant positive effect of budget deficits on interest rates.\n- The effect of deficits on interest rates depends on interaction terms and is not uniform."
    },
    {
      "heading": "Conditions under which the deficit effect is significant",
      "content": "- Deficits are high.\n- Deficits are mostly domestically financed.\n- Deficits interact with high domestic debt.\n- Financial openness is low.\n- Interest rates are liberalized.\n- Financial depth is low."
    },
    {
      "heading": "Subject coverage and keywords",
      "content": "- Subject: Budget planning and preparation, Domestic debt, Emerging and frontier financial markets, Government debt management, Inflation\n- Keywords: budget deficit, deficit, nominal interest rate, WP\n\n---\n\n Content in this bundle\n\n- wp0842\n  - wp0842 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp0842 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/budget-deficits-and-interest-rates-a-fresh-perspective-21667"
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    "Authors: Ari Aisen, David Hauner",
    "Published: February 1, 2008",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451869040.001",
    "Examine both advanced and emerging economies, including for the first time a large emerging market panel.",
    "Explore interactions to explain heterogeneity in previous findings.",
    "Apply system GMM estimation.",
    "There is overall a highly significant positive effect of budget deficits on interest rates.",
    "The effect of deficits on interest rates depends on interaction terms and is not uniform.",
    "Deficits are high.",
    "Deficits are mostly domestically financed.",
    "Deficits interact with high domestic debt.",
    "Financial openness is low.",
    "Interest rates are liberalized.",
    "Financial depth is low.",
    "Subject: Budget planning and preparation, Domestic debt, Emerging and frontier financial markets, Government debt management, Inflation",
    "Keywords: budget deficit, deficit, nominal interest rate, WP",
    "**_wp0842**"
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