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Tito B.S. Moreira and Geraldo Silva Souza
''A Nominal Theory of the Nominal Rate of Interest and the Price Level: Some Empirical Evidence''
( 2009, Vol. 29 No.4 )
This paper aims to investigate the impact of the bond/money ratio on the nominal interest rate. The econometric model chosen fits a dynamic panel data for Canada, Japan and US over the period 1980-2006. We found empirical evidence that Ricardian Equivalence does not hold. The analysis indicates, for the three countries, that the bond/money ratio affects the nominal interest rate.
Keywords: Government debt, Ricardian equivalence, bond/money ratio.
JEL: H6 - National Budget, Deficit, and Debt: General
E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
Manuscript Received : Jul 08 2009 Manuscript Accepted : Dec 18 2009

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