IDEAS home Printed from https://ideas.repec.org/a/mcb/jmoncb/v24y1992i1p43-60.html
   My bibliography  Save this article

Debt Management Objectives for a Small Open Economy

Author

Listed:
  • Boothe, Paul
  • Reid, Bradford

Abstract

In this paper the authors examine the consequences of using cost minimization as the goal of public debt management in a small open economy (SOE). Authorities are assumed to minimize interest costs subject to constraints on their ability to refinance at different maturities, and the information conditioning expectations of future interest rates. A numerical simulation model and a highly disaggregated Canadian data set for the period 1967-87, are used in the analysis. The results presented indicate that, conditional on the SOE assumption, savings do result from following a cost-minimizing strategy. Savings decline as authorities are increasingly constrained in their refinancing choices. However, even the gains in moderately-constrained cases suggest that cost minimization is worthy of serious consideration by authorities. Copyright 1992 by Ohio State University Press.

Suggested Citation

  • Boothe, Paul & Reid, Bradford, 1992. "Debt Management Objectives for a Small Open Economy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 24(1), pages 43-60, February.
  • Handle: RePEc:mcb:jmoncb:v:24:y:1992:i:1:p:43-60
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0022-2879%28199202%2924%3A1%3C43%3ADMOFAS%3E2.0.CO%3B2-C&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Coe, P. & Pesaran, M.H. & Vahey, S.P., 2000. "The Cost Efficiency of UK Debt Management: A Recursive Modelling Approach," Cambridge Working Papers in Economics 0005, Faculty of Economics, University of Cambridge.
    2. Lloyd-Ellis, Huw & Zhu, Xiaodong, 2001. "Fiscal shocks and fiscal risk management," Journal of Monetary Economics, Elsevier, vol. 48(2), pages 309-338, October.
    3. De Broeck, Mark, 1997. "The financial structure of government debt in OECD countries: An examination of the time-consistency issue," Journal of Monetary Economics, Elsevier, vol. 39(2), pages 279-301, July.
    4. Hussein, Khaled A. & de Mello, Luiz Jr., 2001. "Is foreign debt portfolio management efficient in emerging economies?," Journal of Development Economics, Elsevier, vol. 66(1), pages 317-335, October.
    5. Khaled Hussein, 2001. "Is Foreign Debt Portfolio Management Efficient in Emerging Economies?," IMF Working Papers 01/121, International Monetary Fund.
    6. Huw Lloyd-Ellis & Xiaodong Zhu, 2004. "Using Financial Market Information to Enhance Canadian Fiscal Policy," Working Papers 1041, Queen's University, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mcb:jmoncb:v:24:y:1992:i:1:p:43-60. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.