interest rates but is more readily available whereas the opposite holds true for transactional debt. In their choice of loan …'s-length and inside lending focusing on the differential information content across debt types. We find that soft private … information primarily underlies relationship lending whereas hard public information drives arm's-length debt. The bank's relative …

We study the effects of nominal debt on the optimal sequential choice of monetary and debt policy. When the stock of … debt is nominal, the incentive to generate unanticipated inflation increases the cost of the outstanding debt even if no … outstanding stock of debt progressively until these extra costs disappear. Nominal debt is therefore a burden on monetary policy …