Arbeitspapier
The empirics of long-term US interest rates
US government indebtedness and fiscal deficits increased notably following the global financial crisis. Yet long-term interest rates and US Treasury yields have remained remarkably low. Why have long-term interest rates stayed low despite the elevated government indebtedness? What are the drivers of long-term interest rates in the United States? John Maynard Keynes holds that the central bank's actions are the main determinants of long-term interest rates. A simple model is presented where the central bank's actions are the key drivers of long-term interest rates through short-term interest rates and various monetary policy measures. The empirical findings reveal that short-term interest rates, after controlling for other crucial variables such as the rate of inflation, the rate of economic activity, fiscal deficits, government debts, and so forth, are the most important determinants of long-term interest rates in the United States. Public finance variables, such as government fiscal balances or government indebtedness, as a share of nominal GDP appear not to have any discernable effect on long-term interest rates.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 863
- Klassifikation
-
Wirtschaft
Interest Rates: Determination, Term Structure, and Effects
Monetary Policy, Central Banking, and the Supply of Money and Credit: General
Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
Asset Pricing; Trading Volume; Bond Interest Rates
- Thema
-
Government Bond Yields
Long-Term Interest Rates
Short-Term Interest Rates
Monetary Policy
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Akram, Tanweer
Li, Huiqing
- Ereignis
-
Veröffentlichung
- (wer)
-
Levy Economics Institute of Bard College
- (wo)
-
Annandale-on-Hudson, NY
- (wann)
-
2016
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Akram, Tanweer
- Li, Huiqing
- Levy Economics Institute of Bard College
Entstanden
- 2016
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