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dc.contributor.authorHeinemann, Friedrichen_US
dc.contributor.authorWinschel, Viktoren_US
dc.date.accessioned2009-02-16T14:56:09Z-
dc.date.available2009-02-16T14:56:09Z-
dc.date.issued2001en_US
dc.identifier.urihttp://hdl.handle.net/10419/24436-
dc.description.abstractEMU driven interest rate convergence has led to a significant reduction of borrowing costs for some European governments in the second half of the nineties. The paper deals with the possible consequences for deficit behaviour. Although the impact of interest rates on deficits is a crucial element of the market discipline hypothesis it has widely been neglected in the literature. In the theoretical part, a standard political economic model of budgetary policy (Hettich-Winer) is adapted. It turns out that borrowing costs, measured as the interest-growth-differential, and the level of public debt should be important determinants for public deficits. The econometric part tests these predictions for a panel of OECD countries. The results indicate that there is indeed a significant impact of borrowing costs on the primary surplus. This impact is characterised by a robust asymmetry: Reactions in times of increasing borrowing costs are more pronounced than in times of relaxing conditions.en_US
dc.language.isoengen_US
dc.publisherZentrum für Europäische Wirtschaftsforschung (ZEW) Mannheim-
dc.relation.ispartofseriesZEW Discussion Papers 01-16en_US
dc.subject.jelH62en_US
dc.subject.ddc330en_US
dc.subject.keywordmarket disciplineen_US
dc.subject.keywordborrowing costsen_US
dc.subject.keywordEMUen_US
dc.subject.keywordpublic debten_US
dc.subject.keywordgovernment deficitsen_US
dc.subject.stwÖffentlicher Haushalten_US
dc.subject.stwÖffentliche Schuldenen_US
dc.subject.stwKapitalkostenen_US
dc.subject.stwRealzinsen_US
dc.subject.stwPublic Choiceen_US
dc.subject.stwTheorieen_US
dc.subject.stwOECD-Staatenen_US
dc.titlePublic deficits and borrowing costs: the missing half of market disciplineen_US
dc.typeWorking Paperen_US
dc.identifier.ppn327622334en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:zewdip:5371-
Appears in Collections:Publikationen von Forscherinnen und Forschern des ZEW
ZEW Discussion Papers

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