01787cas a2200253 a 4500 AALejournalIMF003369 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451860269 1018-5941 BD-DhAAL BD-DhAAL Choi, Woon. Asymmetric Effects of Government Spending : Does the Level of Real Interest Rates Matter? / Woon Choi, Michael Devereux. Washington, D.C. : International Monetary Fund, 2005. 1 online resource (36 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper empirically explores how fiscal policy (represented by increases in government spending) has asymmetric effects on economic activity at different levels of real interest rates. It suggests that the effect of fiscal policy depends on the level of real rates, since the Ricardian effect is smaller at lower financing costs of fiscal policy. Using threshold regression models on U.S. data, the paper provides new evidence that expansionary government spending is more conducive to short-run growth when real rates are low. It also finds asymmetric effects on interest rates and inflation, and threshold effects associated with substitution between financing methods. Mode of access: Internet Devereux, Michael. IMF Working Papers; Working Paper ; No. 2005/007 Full text available on IMF http://elibrary.imf.org/view/journals/001/2005/007/001.2005.issue-007-en.xml IMF e-Library