-cyclical inflation ex post, which leads risk-averse lenders to require a risk premium ex ante. This makes local currency debt too …

-cyclical inflation ex post, which leads risk-averse lenders to require a risk premium ex ante. This makes local currency debt too …

empirically that countries with more countercyclical inflation, where nominal debt provides better consumption-smoothing, issue … recessions, generating excessively countercyclical inflation in addition to the standard inflationary bias. With countercyclical … inflation, investors require risk premia on nominal debt, making nominal debt issuance costly for low credibility governments …

-cyclical inflation ex post, which leads risk-averse lenders to require a risk premium ex ante. This makes local currency debt too …

This study revisits and tests empirically the Portfolio Theory of Inflation (PTI), which analyzes how the effectiveness … (Bossone, The portfolio theory of inflation and policy (in)effectiveness, 2019). The PTI shows that when an economy is heavily … and policies aimed to stimulate output growth dissipate into domestic currency depreciation and higher inflation, with …