economic activity. The basic premise of classical banking theory is that transactions are typically paid for by incurring debt …, and that the role of the banking system is the monetization of this transaction-based debt. In this framework bank … liabilities are the principal form of money, and they circulate because they are backed by debt that can be repaid by depositing …

debt management policy using the theoretical models and numerical studies. We also investigate the desirable coordination … bonds in our theoretical model. The public bonds, therefore, cannot be sold when the issuance leads the amount of debt … stocks of public debt.This possibility of debt default provides the fiscal authority to issue public bonds strategically in …

ceiling on the debt issuance. The direct ceiling can provide a binding constraint of the public bond issuance for the fiscal … authority of Japan because it has accumulated the debt outstanding much more than other countries …The purpose of this paper is to analyze sustainability issues of Japan's fiscal policy and then to discuss the debt …