Optimal Saving, Interest Rates, and Endogenous Growth

Real Interest Rates, Saving and Investment

This paper investigates the determinants of real interest rates at world and country level. The starting point is the idea that real interest rates re°ect the interaction of desired saving and planned investment, using the framework developed by Barro and Sala-i-Martin (1990) and Barro (1992). The paper updates previous results and extends the analysis to study long real interest rates. We anal...

Endogenous Risk Structure of Interest Rates

In this paper we investigate the behavior of credit yield spreads in an equilibrium framework in which the risk-free interest rate and yields on risky debt are jointly and endogenously determined. The model is one of a partially observable pure exchange economy in which debt is a contingent claim on the cash flow. We find that an increase in risk aversion or an increase in uncertainty about gro...

Consumption and Saving Problem with Stochastic Interest Rates by Kyung

Ination and Interest Rates with Endogenous Market Segmentation

We examine a monetary economy wherein endogenous asset market segmentation permits the extent of household participation in open market operations to smoothly vary with changes in aggregate conditions. While we impose no stickiness at the microeconomic level in either prices or portfolio adjustment, we …nd that our ‡exible asset market segmentation can deliver gradual adjustment in the aggregat...

Composition of Government Spending, Optimal Fiscal Policy, and Endogenous Growth in the Economy of Iran

This paper investigates the optimal fiscal policy, pertaining to government spending, considering different productivity of public services in production function and its impact on the optimal tax rate, the optimal rate of government spending, and optimal economic growth rate. Using the VECM model for Iranian economy over 48 years, results show while the current expenditure has a positive and s...