When crowding out is happening in an economy, increased interest rates are typically a result.
Crowding out refers to a situation where increased government borrowing (usually to finance deficit spending) leads to higher interest rates, which then reduce private investment and consumption spending. This happens because the increased demand for credit by the government raises the cost of borrowing for everyone else in the economy.
As a result, increased interest rates can discourage private spending and investment, as individuals and businesses find it more expensive to borrow money. However, it is important to note that the exact impact of crowding out on government spending, private spending, and interest rates can vary depending on the specific circumstances of the economy.