Is Inflation Effective for Liquidating Short-Term Nominal Debt?
AbstractThe possibility of reducing the real value of domestic nonindexed government debt through inflation is studied. A central result is that this kind of debt liquidation is possible even though prices are sticky and government bonds are short term. A policy implication is that short bond maturities are no safeguard against surprise devaluations intended to lower the burden of the debt. If devaluation incentives are present, nominal nonindexed bonds could give rise to situations in which devaluations are a consequence of self-fulfilling expectations cycles.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Staff Papers - International Monetary Fund.
Volume (Year): 36 (1989)
Issue (Month): 4 (December)
Contact details of provider:
Web page: http://www.palgrave-journals.com/
Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2008.
"The Forgotten History of Domestic Debt,"
NBER Working Papers
13946, National Bureau of Economic Research, Inc.
- John H. Welch, 1991. "Hyperinflation, and internal debt repudiation in Argentina and Brazil: from expectations management to the "Bonex" and "Collor" plans," Research Paper 9107, Federal Reserve Bank of Dallas.
- Aizenman, Joshua & Marion, Nancy, 2009.
"Using Inflation to Erode the U.S. Public Debt,"
Santa Cruz Department of Economics, Working Paper Series
qt6xf174rs, Department of Economics, UC Santa Cruz.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Gale).
If references are entirely missing, you can add them using this form.