TY  - JOUR
AU  - Mankiw,N. Gregory
TI  - Government Purchases and Real Interest Rates
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2009
PY  - 1987
Y2  - August 1987
UR  - http://www.nber.org/papers/w2009
L1  - http://www.nber.org/papers/w2009.pdf
N1  - Author contact info:
N. Gregory Mankiw
Department of Economics
Littauer 223
Harvard University
Cambridge, MA  02138
Tel: 617/495-4301
Fax: 617/495-7730
E-Mail: ngmankiw@fas.harvard.edu
AB  - This paper examines the dynamic impact of government purchases in a simple general equilibrium model with both durable and non-durable consumer goods as well as productive capital. The model generates perhaps surprising results. In particular, increases in government purchases are shown to cause reductions in real interest rates. The model thus provides a possible explanation for the observed behavior of real interest rates around wars.
ER  -