Working Papers present research work by both Danmarks Nationalbank’s employees and our partners. Working Papers are primarily targeted at professionals and people with an interest in central banking research as well as economics and finance in a broader sense.
Fiscal Policy and Real Interest Rates
We study the relation between real rates and fiscal policy. Unfunded fiscal shocks generate a decline in real rates, while funded shocks cause an increase. The US fiscal real rate, i.e., the component of the real rate related to unfunded fiscal shocks, accounts for a large share of the low-frequency movements in real rates.
E50, E62, E30