The impact of fiscal policy on interest rates is among the most debated issues in macroeconomics,
and a key policy issue in times of high deficits. The empirical evidence for
the US and other OECD countries has always been mixed at best, starting from Plosser
[1982] and [1987] and Evans [1987], who, using different methodologies from the present
study, could not find evidence of positive effects of debt innovations on interest rates in
the US and in 5 OECD countries, respectively.