REAL INTEREST RATES AND GOVERNMENT DEBT DURING STABILIZATION

Article, Preprint OPEN
Velasco, Andres;
(1989)
  • Journal: Journal of Money, Credit and Banking,volume 25,issue 2 May,pages259-72
  • Subject: interest rate ; deficit ; inflation ; debt

High real interest rates typically accompany successful disinflations. If government deficits are financed with domestic debt, this behavior of interest rates can be destabilizing. High interest rates increase debt service costs and contribute to the accumulation of deb... View more
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