Stock-Flow Adjustments and Interest Rates

ISEG Economics Department Working Paper No. WP 05/2017/DE/UECE

8 Pages Posted: 1 Feb 2017

See all articles by António Afonso

António Afonso

University of Lisbon - ISEG (School of Economics and Management); UECE (Research Unit on Complexity and Economics); ISEG Lisbon School of Economics and Management,Universidade de Lisboa; REM - Research in Economics and Mathematics

José Alves

Technical University of Lisbon (UTL) - Department of Economics; UECE - Research Unit on Complexity in Economics

Date Written: February 1, 2017

Abstract

We assess the effects of stock-flow adjustments (SFA) on short and long-term interest rates for 14 European countries between 1970 and 2015, in panel and SUR analysis. We conclude that an increase in SFA reduces long- and short-term interest rates, with higher reductions for short-term rates. Furthermore, the decreasing effects of an increment in the stock-flow have reduced since the 2008-2009 financial crisis. As expected, there is also an upward push on both interest rates from a rise in the debt ratio.

Keywords: Stock-flow adjustment; Debt; Interest rates; SUR; Panel

JEL Classification: C33, E43, H63, H83

Suggested Citation

Afonso, António and Alves, José and Alves, José, Stock-Flow Adjustments and Interest Rates (February 1, 2017). ISEG Economics Department Working Paper No. WP 05/2017/DE/UECE, Available at SSRN: https://ssrn.com/abstract=2909521 or http://dx.doi.org/10.2139/ssrn.2909521

António Afonso (Contact Author)

University of Lisbon - ISEG (School of Economics and Management) ( email )

R. Miguel Lupi, 20
Lisbon, 1248-078
Portugal
+351 21 392 5985 (Phone)
+351 21 396 6407 (Fax)

HOME PAGE: http://www.iseg.ulisboa.pt/aquila/homepage/aafonso/research

UECE (Research Unit on Complexity and Economics)

Rua Miguel Lupi 20
Lisbon, 1249-078
Portugal
+351-213 925 912 (Phone)
+351-213 971 196 (Fax)

HOME PAGE: http://uece.rc.iseg.ulisboa.pt/

ISEG Lisbon School of Economics and Management,Universidade de Lisboa ( email )

Rua do Quelhas 6
LISBOA, 1200-781
Portugal

REM - Research in Economics and Mathematics ( email )

ISEG, Universidade de Lisboa
Rua Miguel Lupi, 20
Lisboa, 1249-078
Portugal

HOME PAGE: http://rem.rc.iseg.ulisboa.pt/

José Alves

UECE - Research Unit on Complexity in Economics ( email )

ISEG/UTL, Rua Miguel Lupi 20
Lisboa, 1249-078
Portugal

Technical University of Lisbon (UTL) - Department of Economics ( email )

R. Miguel Lupi, 20
Lisbon, 1248-078
Portugal

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
40
Abstract Views
768
PlumX Metrics