Long-Term Interest Rates and Public Debt Maturity
10 Pages Posted: 2 Oct 2013
Date Written: September 30, 2013
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
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