TRANSMISSION OF FISCAL SPILLOVERS ON INTEREST RATES IN EMU

• Authors: Petrović Malešević Lena
• Languages of publication: EN

Abstracts

EN

In this paper we investigate the relationship between fiscal imbalances and long-term interest rates and assess various transmission channels of fiscal spillovers in EMU during 2002 – 2015. Our results support the importance of bilateral trade, informational and geographical channel of transmission, with spillovers accounting for more than 50 percent of the overall effect. Our findings suggest that if the share of public debt in GDP in all countries increases by 1 percentage point, the long-term interest rates of a given country will, on average, increase by 2.56 – 5.98 basis points, 1.9 – 3.61 basis points of which can be attributed to indirect effects.

Keywords

EN

PUBLIC DEBT; LONG-TERM INTEREST RATES; EMU; SPATIAL PANEL ANALYSIS; SPILLOVER EFFECTS

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2020
• Volume: 68
• Issue: 9
• Pages: 939 – 962

Contributors

author

Petrović Malešević Lena

• University of Split, Faculty of Economics, Business and Tourism, CERGE-EI Teaching Fellow, Cvite Fiskovića 5, 21000 Split, Croatia

Identifiers

DOI

https://doi.org/10.31577/ekoncas.2020.09.04