Fiscal Policy and the Term Structure of Interest Rates: An Intertemporal Optimizing Analysis

The Treasury Bill rate is regarded as an exogenous policy instrument in the National Institute's forecasting model. Other interest rates in the model are linked to this rate by term-structure equations. This approach, while justifiable for forecasting, has limitations when the model is used for policy simulations since it ignores the responses of interest rates to changes in economic conditions. This note shows how the properties of the model are affected when interest rates are treated as endogenous.

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Fiscal Policy, Public Debt and the Term Structure of Interest Rates

10.1007/978-3-642-58595-1 ◽

1999 ◽

Cited By ~ 1

Author(s):

Roland Demmel

Keyword(s):

Fiscal Policy ◽

Interest Rates ◽

Term Structure ◽

Public Debt

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DAMPAK KEBIJAKAN FISKAL TERHADAP KINERJA SEKTOR PERTANIAN DI SULAWESI TENGGARA

Jurnal Sosio Agribisnis ◽

10.33772/jsa.v1i1.1826 ◽

2017 ◽

Vol 1 (1) ◽

Author(s):

La Ode Jabuddin ◽

Ayub M Padangaran ◽

Azhar Bafadal Bafadal

Keyword(s):

Fiscal Policy ◽

Interest Rates ◽

Agricultural Sector ◽

Simultaneous Equations ◽

Poor People ◽

Land Area ◽

Factors Affecting ◽

Historical Simulation ◽

The Impact ◽

Direct Expenditure

This study aims to: (1) Knowing the dynamics of fiscal policy and the performance of the agricultural sector, (2) Analyze the factors that influence fiscal policy and the performance of the agricultural sector, and (3) Analyzing the impact of fiscal policy on the performance of the agricultural sector. The data used in this study were pooled 2005-2013 data in the aggregate. Econometric model the impact of fiscal policy on the performance of the agricultural sector is built in the form of simultaneous equations, consisting of 7 equations with 25 total variables in the model, 7 endogenous variables, 12 exogenous variables, and 6 variables lag. The model is estimated by 2SLS method SYSLIN procedures and historical simulation with SIMNLIN procedure.The results showed that: (1) The development of fiscal policy in Southeast Sulawesi from year to year tends to increase, (2) The performance of the agricultural sector from the aspect of GDP has decreased, from the aspect of labor is still consistent, in terms of investment to grow positively, and assign roles which means to decrease the number of poor people, (3) factors affecting fiscal policy is local revenues, equalization funds, other revenues, as well as the lag fiscal policy, (4) the factors that affect the performance of the agricultural sector from the aspect GDP is labor, direct expenditure and GDP lag; from the aspect of labor is the total labor force, investment, land area, direct expenditure, as well as the lag of labor; from the aspect of investment is influenced by GDP per capita, land area, interest rates and investment lag; as well as from the aspect of poor people, are affected by population, investments, direct expenditure and poverty lag, (5). Fiscal policy impact on the agricultural sector GDP increase, a decrease in the number of poor, declining agricultural laborers, and a decrease in the amount of investment in the agricultural sector.Keywords: Fiscal policy, the performance of the agricultural sector, the simultaneous equations

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