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International Advances in Economic Research

, Volume 2, Issue 1, pp 34–40 | Cite as

Deficts and interest rates: A nonparamertic analysis

  • William G. Gissy
Articles

Abstract

Numerous studies analyzing the relationship between federal budget deficits and short-term interest rates have generated conflicting results. This study investigates the relationship between monthly treasury borrowing and the monthly change in the nominal three-month T-bill rate. Employing two nonparametric correlation tests, this study concludes that significant contemporaneous correlation exists between treasury borrowing and interest rate changes. Additionally, this study finds evidence of a treasury reaction function, in that treasury borrowing is inversely related to the previous months interest rate change.

Keywords

Economic Growth Interest Rate Rate Change International Economic Correlation Test 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Atlantic Economic Society 1996

Authors and Affiliations

  • William G. Gissy
    • 1
  1. 1.Morehouse CollegeUSA

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