where taxes and spending no longer adjust to stabilize debt. In such economies, monetary policy may lose its ability to …

debt, as well as through their income, their mix of assets, their liabilities, and their own solvency. This paper inspects … constraint. It discusses five channels: (i) how inflation can (and cannot) lower the real burden of the public debt, (ii) how … seignorage is generated and subject to what constraints, (iii) whether central bank liabilities should count as public debt, (iv …

Single-equation estimates of fiscal reaction functions, which relate primary surpluses to past debt-GDP ratios and … behavior. Biases arise from failure to model the general equilibrium relationships between government debt and surpluses …, relationships that bring in the forward-looking nature of nominal debt valuation and the role of monetary policy in that valuation …

The paper explores the implications of high debt for monetary policy. In Europe, debt (and deficits) play a special … money. The paper reviews two historical episodes-- the German, UK, and French experience in the 1920s and the US debt …

inflation rate each period in a discretionary manner. One way to view the model is as a synthesis of the "tax-smoothing" theory …

future, political economy factors, such as strengthened central bank independence or more credible public debt policy, would …

The European Central Bank is unique in setting monetary policy for several sovereign states with heterogeneous debt …

institutions, rather than the plurality/proportional representation" dichotomy, which has the greatest impact on debt levels …

macroeconomic implications. " First, fiscal deficits and debt accumulation occur even when there are no reasons for intertemporal … during which government debt is built up …

for intertemporal smoothing, and in the long run government debt tends to be excessively high; peculiar time profiles for … equilibrium paths can occur starting at the same initial level of government debt …