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  4. July 2011
  5. Interest Rate Risk and Other Determinants of Post-WWII US Government Debt/GDP Dynamics

American Economic Journal:
Macroeconomics

ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)

Interest Rate Risk and Other Determinants of Post-WWII US Government Debt/GDP Dynamics

  • George J. Hall
  • Thomas J. Sargent
American Economic Journal: Macroeconomics
vol. 3, no. 3, July 2011
(pp. 192–214)
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Abstract

This paper uses a sequence of government budget constraints to motivate estimates of returns on the US Federal government debt. Our estimates differ conceptually and quantitatively from the interest payments reported by the US government. We use our estimates to account for contributions to the evolution of the debt-GDP ratio made by inflation, growth, and nominal returns paid on debts of different maturities. (JEL E23, E31, E43, G12, H63)

Citation

Hall, George J., and Thomas J. Sargent. 2011. "Interest Rate Risk and Other Determinants of Post-WWII US Government Debt/GDP Dynamics." American Economic Journal: Macroeconomics, 3 (3): 192–214. DOI: 10.1257/mac.3.3.192

Additional Materials

JEL Classification

  • E23 Macroeconomics: Production
  • E31 Price Level; Inflation; Deflation
  • E43 Interest Rates: Determination, Term Structure, and Effects
  • G12 Asset Pricing; Trading volume; Bond Interest Rates
  • H63 National Debt; Debt Management; Sovereign Debt
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