Domestic and international financial market responses to Federal deficit announcements

Article Abstract:

An examination of the response of domestic and international financial variables to announcements of Federal deficit projections over the 1981-94 period is presented. A positive response by US Treasury securities rates to the announcements was observed. Foreign long-term interest rates also increased in response to the announced increases in deficit projections. There was an indication of a positive relation between the exchange value of the dollar and the announced changes. The announced changes also elicited a positive response from gold prices.

Forecasts and trends, United States. Federal Reserve Board, Budget deficits, Deficit financing, Deficit spending

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Money and economic activity revisited

Article Abstract:

Cointegration tests reveal that there exists an equilibrium relationship between money and income in all data samples taken starting with the Civil War, but often fails in numerous shorter samples. Nevertheless, when the normal monetary setbacks are expressly enforced, a cointegrating relationship is offtimes gained, even in relatively short samples. It was found that money is the key variable in accounting for the real output for the full 1874-1993, and also for 1952-1993, even when interest rates effects are considered.

Economic Statistics & Research, Evaluation, Economic research, Economic conditions, Money, Income

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European monetary union: a new approach

Article Abstract:

The implementation of European monetary union (EMU) is set to affect the financial state of its member countries. A study shows that implementation of EMU tends to reduce the exchange rate volatility and real interest rates of United Kingdom. The variability of UK's exchange rate against the US dollar, meanwhile, is expected to increase. Germany, on the other hand, is set to experience decreased exchange rate variability but is more likely to benefit more from the European monetary union.

Intnl Economic Policy, Economic aspects, International economic relations, European Union, European Monetary System

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