01728cas a2200241 a 4500 AALejournalIMF015203 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484358603 1018-5941 BD-DhAAL BD-DhAAL Rafiq, Sohrab. How Important are Debt and Growth Expectations for Interest Rates? / Sohrab Rafiq. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (27 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 uses a dataset on private-sector risk aversion as well as expectations of long-run growth and debt to explain trends in implied forward rates on government bonds in the G-7 countries. The results show, consistent with the literature, that a one-percent rise in the long-run projected debt-to-GDP ratio causes an increase in bond yields of a relatively modest 1-to-6 basis points. Shocks to growth expectations and risk aversion have been comparatively more successful in explaining the behavior of long-term rates. The findings imply that growth policies rather than long-run projections of fiscal outcomes may be more important in helping influence long-term borrowing costs. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2015/094 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/094/001.2015.issue-094-en.xml IMF e-Library