Islam, M.F. and Hasan, Mohammad S. (2007) The Macroeconomic Effects of Government Debt on Capital Formation in the United States: An Empirical Investigation. The Manchester School , 75 (5). pp. 598-616. ISSN 1463-6786.
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| Official URL http://dx.doi.org/10.1111/j.1467-9957.2007.01032.x |
Abstract
In this paper we empirically examine the effects of government debt on interest rate, price, output and capital formation in the USA during the post-war period. Using co-integration methodology supplemented with variance decompositions and impulse response functions, the study found a long-run equilibrium as well as a strong feedback relationship between real debt and real capital formation. The results also indicate that public debt increases inflation with adverse effects on capital formation and real output which broadly support the views of 'monetarists', and partially of the neo-Ricardian economists.
| Item Type: | Article |
|---|---|
| Subjects: | H Social Sciences |
| Divisions: | Faculties > Social Sciences > Kent Business School > Accounting and Finance |
| Depositing User: | Rebecca Stevenson |
| Date Deposited: | 06 Jan 2010 11:51 |
| Last Modified: | 27 Jun 2012 10:19 |
| Resource URI: | http://kar.kent.ac.uk/id/eprint/23567 (The current URI for this page, for reference purposes) |
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