01817cas a2200241 a 4500 AALejournalIMF004005 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451863239 1018-5941 BD-DhAAL BD-DhAAL Kinoshita, Noriaki. Government Debt and Long-Term Interest Rates / Noriaki Kinoshita. Washington, D.C. : International Monetary Fund, 2006. 1 online resource (25 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 examines the relationship between government debt and long-term interest rates. A dynamic general equilibrium model that incorporates debt nonneutrality is specified and solved, and numerical simulations using the model are undertaken. In addition, empirical evidence using panel data for 19 industrial countries is examined. The estimation provides some evidence supporting the theoretical predictions: the paper finds that the simulated and estimated interest rate effects of government debt tend to be small. However, an increase in government consumption and debt leads to a considerably larger effect. The paper also argues that, although the interest rate effects of pure crowding out may be limited, the economic impact of accumulating government debt cannot be ignored. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2006/063 Full text available on IMF http://elibrary.imf.org/view/journals/001/2006/063/001.2006.issue-063-en.xml IMF e-Library