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Government Debt Limits and Stabilization Policy

Murphy, Daniel - 2020

We evaluate alternative public debt management policies in light of constraints imposed by the effective lower bound on interest rates. Replacing the current limit on gross debt issued by the fiscal authority with a limit on consolidated debt of the government can ensure that output always...

Persistent link: https://www.econbiz.de/10012822665

Government Debt Limits and Stabilization Policy

Murphy, Daniel - 2020

Persistent link: https://www.econbiz.de/10012830704

Tight Money and the Sustainability of Public Debt

Pekarski, Sergey - 2016

In the celebrated paper “Some unpleasant monetarist arithmetic”, Sargent and Wallace (1981) showed that tight monetary policy is not feasible unless it is supported by appropriate fiscal adjustment. In this paper, we explore a simple forward-looking monetary model to show that an anticipated...

Persistent link: https://www.econbiz.de/10013004616

Yields on Sovereign Debt, Fragmentation and Monetary Policy Transmission in the Euro Area : A GVAR Approach

Echevarria-Icaza, Victor - 2017

The divergence in sovereign yields has been presented as a reason for the lack of traction of monetary policy. We use a GVAR framework to assess the transmission of monetary policy in the period 2005-2016. We identify sovereign yield divergence as a key mechanism by which the leverage channel of...

Persistent link: https://www.econbiz.de/10012963254

Inflation Dynamics : The Role of Public Debt and Policy Regimes

Bhattarai, Saroj - 2015

In a passive monetary and active fiscal policy regime, changes in the value of public debt generate wealth effects on households. Then, in contrast to the active monetary and passive fiscal policy regime, inflation moves oppositely from the inflation target and a stronger reaction of interest...

Persistent link: https://www.econbiz.de/10013036857

Is a Very High Public Debt a Problem?

Leão, Pedro - 2015

This paper has two main objectives. The first is to propose a policy architecture that can prevent a very high public debt from resulting in a high tax burden, a government default, or inflation. The second objective is to show that government deficits do not face a financing problem. After...

Persistent link: https://www.econbiz.de/10013018547

Funding behaviour of debt management offices and the ECB's Public Sector Purchase Programme

Plessen-Mátyás, Katharina; Kaufmann, Christoph; … - 2021

This paper investigates whether the funding behaviour of euro area debt management offices (DMOs) changed with the start of the ECB's Public Sector Purchase Programme (PSPP). Our results show that (i) lower yield levels and (ii) PSPP purchases supported higher maturities at issuance. The former...

Persistent link: https://www.econbiz.de/10012518265

Fiscal policy and inflation : understanding the role of expectations in Mexico

Lopez-Martin, Bernabe; Ramírez de Aguilar, Alberto; … - 2018

This paper estimates a hidden Markov model where inflation is determined by government deficits financed through money creation and by expectations dynamics. The baseline model, proposed by Sargent et al. (2009) is able to distinguish between causes and remedies of hyperinflation, such as...

Persistent link: https://www.econbiz.de/10012165913

Fiscal Histories

Cochrane, John H. - 2022

The fiscal theory states that inflation adjusts so that the real value of government debt equals the present value of … fiscal theory to interpret historical episodes, including the rise and fall of inflation in the 1970s and 1980s, the long … pegs, the ends of hyperinflations, currency crashes, and the success of inflation targets. Going forward, fiscal theory …

Persistent link: https://www.econbiz.de/10014079501

Monetary Policy in the Transition to a Zero Federal Deficit

Baum, Christopher F.; Karasulu, Meral - 1997

In the United States, eradication of persistent federal deficits has won broad bipartisan support. At the same time, political pressures have mounted to strengthen the Federal Reserve's explicit concern with price stability. Proposals under consideration would require a much narrower focus on...

Persistent link: https://www.econbiz.de/10014118206