Does Urgency Affect Price at Market? An Analysis of U.S. Treasury Short-Term Finance
Like all economic agents government must actively manage its cash position in order to meet obligations. In the U.S., when the short-term cash position is not adequate, Treasury offers bills that are not previously scheduled-Cash Management Bills. Using data from Treasury's proprietary Domestic Finance Database, this paper finds unscheduled bills have consistently higher yields than normally scheduled bills, suggesting the more inelastic demand represented by this type of finance has an impact on costs. Several factors are identified which contribute to the costs of Cash Management for Treasury.
Volume (Year): 38 (2006)
Issue (Month): 4 (June)
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