Reconsidering the link between fiscal policy and interest rates in Australia

  • Yong Hong Yan and Shane Brittle
  • Treasury

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HTMLReconsidering the link between fiscal policy and interest rates in Australia

17 September 2010This paper examines the relationship between government debt and the real interest margin between Australian and US ten-year government bond yields. Results for 1990 to 2009 suggest that Australian general government net debt has no impact on the short run real interest margin, and has only a small effect in the long run. Further, the estimates suggest that movements in US general government net debt have a considerably larger effect than Australian general government net debt — implying that US influences take greater prominence in explaining the real interest margin.

Publication typeDiscussion paper
Publisher TypeGovernment or Gov agency
CoverageAustralia
Permanent URLhttp://apo.org.au/node/22626
Views2083

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Government debt

Economics

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