Management of the Nominal Public Debt Theory and Applications
Optimal management of the public debt is explored in a context where economic policy is continuously revised because, when the public debt is non indexed, policy makers are tempted to use inflation in order to reduce the real value of the public debt.The model`s implications are explored following two approaches. First the effects of various exogenous disturbances are examined by means of numerical simulations. Secondly the analysis explores for Italy Ireland and the United States if the model`s implications concerning the maturity structure of government debt are consistent with actual experience