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The Macroeconomic Effects of Government Debt on Capital Formation in the United States: An Empirical Investigation

Islam, M.Faizul, Hasan, Mohammad S (2007) The Macroeconomic Effects of Government Debt on Capital Formation in the United States: An Empirical Investigation. Manchester School, 75 (5). pp. 598-616. ISSN 1463-6786. (doi:10.1111/j.1467-9957.2007.01032.x) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:23567)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided.
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
DOI/Identification number: 10.1111/j.1467-9957.2007.01032.x
Subjects: H Social Sciences
Divisions: Divisions > Kent Business School - Division > Department of Accounting and Finance
Depositing User: Mohammad Hasan
Date Deposited: 06 Jan 2010 11:51 UTC
Last Modified: 16 Nov 2021 10:01 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/23567 (The current URI for this page, for reference purposes)
Hasan, Mohammad S: https://orcid.org/0000-0002-2453-6868
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