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Monetary Policy Under a Fiscal Theory of Sovereign Default

Schabert, Andreas - 2009

This paper examines equilibrium determination under different monetary policy regimes when the government might default on its debt. We apply a cash-in-advance model where the government does not have access to non-distortionary taxation and does not account for initial outstanding debt when it...

Persistent link: https://www.econbiz.de/10013154953

Escaping the Great Recession

Bianchi, Francesco - 2016

We show that policy uncertainty about how the rising public debt will be stabilized accounts for the lack of deflation in the US economy at the zero lower bound. We first estimate a Markov-switching VAR to highlight that a zero-lower-bound regime captures most of the comovements during the Great...

Persistent link: https://www.econbiz.de/10012979122

Nominal Targeting in an Economy with Government Debt

Bai, Yuting - 2016

The fiscal policy environment central banks operate in can be radically different with respect to debt levels, maturity structures and whether or not fiscal adjustments are spending or tax based. Despite this, most analyses of monetary policy delegation schemes typically ignore the behavior of...

Persistent link: https://www.econbiz.de/10013004050

Debt Dynamics and Monetary Policy : A Note

Laseen, Stefan - 2014

"Leaning against the wind" - a tighter monetary policy than necessary for stabilizing inflation around the inflation … extensions to Svensson's analysis. In particular, we take Svensson's debt model to the data and show that it provides an … incomplete account of short term debt dynamics. Further, the overall analysis of the effects of monetary policy on debt rests on …

Persistent link: https://www.econbiz.de/10013052303

Public Debt and Changing Inflation Targets

Krause, Michael U. - 2016

What are the effects of a higher central bank inflation target on the burden of real public debt? Several recent … proposals have suggested that even a moderate increase in the inflation target can have a pronounced effect on real public debt … inflation target. We find that moderate changes in the inflation target only have significant effects on real public debt if …

Persistent link: https://www.econbiz.de/10012988795

Escaping the Great Recession

Bianchi, Francesco - 2014

announcements by the fiscal and monetary authorities can lead to high inflation and large output losses. The policy trade-off can be …

Persistent link: https://www.econbiz.de/10013040335

Escaping the Great Recession

Bianchi, Francesco - 2015

High uncertainty is an inherent implication of the zero lower bound, while deflation is not because of inflationary pressure due to uncertainty about how debt will be stabilized. We show that policy uncertainty empirically accounts for the absence of deflation in the US economy. Announcing...

Persistent link: https://www.econbiz.de/10013035011

Dealing with a Liquidity Trap When Government Debt Matters : Optimal Time-Consistent Monetary and Fiscal Policy

Burgert, Matthias - 2014

sector expectations that helps to dampen the fall in output and inflation at the outset of the liquidity trap …

Persistent link: https://www.econbiz.de/10013061806

(Optimal) monetary policy with and without debt

Chafwehé, Boris; Oikonomou, Rigas; Priftis, Romanos; … - 2021 - Last updated: January 26, 2021

stabilizing inflation, whereas under no debt concerns, monetary policy is very effective in stabilizing the macroeconomy. …

Persistent link: https://www.econbiz.de/10012420260

Debt management in a world of fiscal dominance

Chafwehé, Boris; De Beauffort, Charles; Oikonomou, Rigas - 2021

We study the impact of debt maturity management in an economy where monetary policy is 'passive' and subservient to … of monetary policy in controlling in ation. This requires debt management to focus on issuing long bonds. Moreover, we …

Persistent link: https://www.econbiz.de/10012593883