An empirical analysis of municipal bond ratings in Virginia

Article Abstract:

An ordered-probit analysis was used to assess the determinants of municipal bond ratings in Virginia. Virginia's bond ratings were found to be sensitive to economic-based factors, such as capital expenditures, real estate taxes and per capita revenue. These factors represent the revenue generating and wealth sustaining capability of the area. Debt-based variables were found to be insignificant in determining Virginia's municipal bond rating as compared with demographic-based variables which were found to be slightly significant.

Municipal Govt Finance NEC, Evaluation, Virginia, Economic aspects, Securities, Local government, Bonds, Bonds (Securities), Local finance, Municipal bonds

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FOMC anti-inflation policy: a quicker trigger or nothing new

Article Abstract:

A mathematical model was developed to find the basis of the decision by the Federal Reserve's Open Market Committee (FOMC) to tighten its monetary policy in 1994. OLS regressions and Vector Auto Regressive modeling were performed on data representing various economic indicators. Results of the modeling showed the FOMC's decision to tighten its monetary policy was based on an anticipated incidence of inflation rather than on an actual condition of inflation.

Federal Open Market Committee, Economic policy, Inflation (Finance), Monetary policy, Inflation (Economics), United States. Federal Open Market Committee

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Debt, deficits and long-term rates

Article Abstract:

A loanable funds framework describing the interest rate determination process was used to assess the relationship between government borrowing and long-term interest rates. Results of the analysis showed that government borrowing does not cause higher long-term interest rates. Rather, expected inflation and short-term rates as well as net foreign portfolio investments are more significant determinants of long-term interest rates.

National Government Liabilities & Debt, Interest rates, National debt, Public debts, Deficit financing, Deficit spending

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