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Fiscal Monitor, October 2021 : Strengthening the Credibility of Public Finances

International Monetary Fund - 2021

Chapter 1 argues that fiscal policy should remain nimble and strengthen its medium-term frameworks, as countries face highly uncertain and differentiated prospects. Vaccination has saved lives and is helping fuel a nascent recovery, but risks are elevated amidst new virus variants, high debt,...

Persistent link: https://www.econbiz.de/10015060635

Credibility and Nominal Debt : Exploring the Role of Maturity in Managing Inflation

International Monetary Fund - 1989

This paper focuses on the role of debt maturity in managing the government’s incentives to use opportunistic inflation to reduce the ex post real value of its nominal liabilities. The maturity structure of government debt is shown to be a powerful instrument to affect the time profile of the...

Persistent link: https://www.econbiz.de/10014395780

Credibility. Capital Controls, and the EMS

International Monetary Fund - 1989

A common rationale for EMS membership is that it enhances the credibility of a central bank’s commitment to stable … exchange rate bands and the prevalence of capital controls. In our model, capital controls themselves affect credibility … to reconcile the non-zero width of the bands with the credibility-based interpretation of the EMS …

Persistent link: https://www.econbiz.de/10014396035

Inflation Targeting Under Imperfect Policy Credibility

International Monetary Fund - 2009

This paper presents a model for Inflation Targeting under imperfect policy credibility. It modifies the conventional … model in three ways: an endogenous policy credibility process, by which monetary policy can gain or lose credibility over … time; non-linearities in the inflation equation and in the credibility generating process; and an explicit loss function …

Persistent link: https://www.econbiz.de/10014402503

Contacts, Credibility and Common Knowledge : Their Influenceon Inflation Convergence

International Monetary Fund - 1989

This paper explains why sovereign issuers of reserve currencies do not use unexpected inflation to repudiate their foreign liabilities. Monetary restraint is exercised because of the fear that reserve users will switch to other currencies if an attempt is made to raise “excessive” revenue....

Persistent link: https://www.econbiz.de/10014396294

Strategic Investment in a Debt Bargaining Framework

International Monetary Fund - 1989

This paper analyzes the strategic role of investment from a debtor country’s perspective. The framework is one in which, if the debtor country is unable to meet debt obligations, a bargaining regime determines the amount of debt repayment. In the context of a two-country real trade model, debt...