Why Should Governments Issue Bonds?
AbstractThis paper has three purposes. First, it shows that several recent arguments that the optimal nominal interest rate on government bonds is zero even when second best considerations are accounted for rest on perfect substitutes assumptions. Second, it characterizes the conditions under which the issue of interest-bearing bonds is desirable once these assumptions are relaxed. And third, it shows that these potential microeconomic benefits of bond issue are closely related to traditional macroeconomic analyses of the government's choice between money and bond finance. Copyright 1993 by Ohio State University Press.
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Bibliographic InfoArticle provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.
Volume (Year): 25 (1993)
Issue (Month): 2 (May)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879
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- Amano, Robert A., 1998. "On the Optimal Seigniorage Hypothesis," Journal of Macroeconomics, Elsevier, vol. 20(2), pages 295-308, April.
- Stacey Schreft & Bruce Smith, 2008.
"The social value of risk-free government debt,"
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- Miquel Faig, 1999.
"The Optimal structure of Liquidity Provided by a Self Financed Central Bank,"
faig-99-01, University of Toronto, Department of Economics.
- Faig, Miquel, 2000. "The Optimal Structure of Liquidity Provided by a Self-Financed Central Bank," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(4), pages 746-65, November.
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