Long-Term Interest Rates and Public Debt Maturity

10 Pages Posted: 2 Oct 2013

See all articles by Ieva Sakalauskaite

Ieva Sakalauskaite

University of Amsterdam

Roel M. W. J. Beetsma

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM); European Commission; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Tinbergen Institute; Netspar

Massimo Giuliodori

University of Amsterdam - Faculty of Economics & Econometrics (FEE); Tinbergen Institute

Multiple version iconThere are 2 versions of this paper

Date Written: September 30, 2013

Abstract

For a sample of sixteen OECD countries over the period 1980-2007 we show that, for given debt-GDP ratio, an increase in the maturity of the public debt by one year lowers its long-term interest rate by around 20-30 basis points. This effect is stronger for countries with higher average inflation or debt.

Keywords: debt, maturity, long-term interest rates, inflation, OECD

JEL Classification: E430, E440, H620, H630, H680

Suggested Citation

Sakalauskaite, Ieva and Beetsma, Roel M. W. J. and Giuliodori, Massimo, Long-Term Interest Rates and Public Debt Maturity (September 30, 2013). CESifo Working Paper Series No. 4408, Available at SSRN: https://ssrn.com/abstract=2334681

Ieva Sakalauskaite

University of Amsterdam ( email )

Spui 21
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Roel M. W. J. Beetsma (Contact Author)

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM) ( email )

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Massimo Giuliodori

University of Amsterdam - Faculty of Economics & Econometrics (FEE) ( email )

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Tinbergen Institute ( email )

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