Working Paper
Long-Term Interest Rates and Public Debt Maturity
Ieva Sakalauskaite, Roel Beetsma, Massimo Giuliodori
CESifo, Munich, 2013
CESifo Working Paper No. 4408
CESifo, Munich, 2013
CESifo Working Paper No. 4408
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.
CESifo Category
Fiscal Policy, Macroeconomics and Growth
Public Finance
Fiscal Policy, Macroeconomics and Growth
Public Finance
Keywords: debt, maturity, long-term interest rates, inflation, OECD
JEL Classification: E430, E440, H620, H630, H680