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A normative argument towards the independence of public debt management

Author

Listed:
  • Panagiotis Tsintzos

    ("University of Thessaly, Volos, Greece")

  • Tilemahos Efthimiadis

    ("European Commission, Joint Research Centre (JRC), Petten, the Netherlands")

  • Stephanos Papadamou

    ("University of Thessaly, Volos, Greece")

  • Eleftherios Spyromitros

    ("Democritus University of Thrace, Komotini, Greece")

Abstract

"We explore the links between credit expansion, inflation, and inflation expectations, and show that active public debt management can trigger a non-interest rate channel of credit expansion. This creates incentives for the government to use debt management for promoting non-debt management goals, thus, choosing debt maturity structure that differs from its optimal. Through a theoretical monetary policy game, we show that it is welfare improving to delegate public debt management to an independent office separate from the fiscal authority."

Suggested Citation

  • Panagiotis Tsintzos & Tilemahos Efthimiadis & Stephanos Papadamou & Eleftherios Spyromitros, 2023. "A normative argument towards the independence of public debt management," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 15(2), pages 127-137, June.
    • Handle: RePEc:ren:journl:v:15:y:2023:i:2:p:127-137
    DOI: https://doi.org/10.15353/rea.v15i2.4928
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    More about this item

    Keywords

    macroprudential policy; fiscal policy; central banks; public debt;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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