Monday, October 15, 2012

Interest Rate Spreads (Again)

See how the U.S. Germany, and United Kingdom have all seen borrowing costs decline, roughly in the same proportion, despite vastly different public finance regimes, budget deficits, and stocks of debt, because they all have their own currencies (the euro being effectively Germany's currency.)
Here's the borrowing costs of Spain and Italy divering from the original three. No real point to this, but its sometimes helpful to have a picture to illustrate a phenomenon. 

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