IDEAS home Printed from https://ideas.repec.org/p/chb/bcchwp/27.html
   My bibliography  Save this paper

Public Debt Indexation and Denomination: The Case of Brazil

Author

Listed:
  • Ilan Goldfajn

Abstract

The paper models the optimal debt management strategy of the public sector when issuing nominal, pricelevel indexed and foreign denominated debt securities. The model predicts that the variance of inflation, the size of the public debt, the variance of the real exchange rate, and the correlation of inflation with public expenditures are the main determinants of public debt management. Using this framework, the paper analyzes the Brazilian experience with indexed debt in the last decade. In particular, it explains the large increase of indexed public debt in Brazil prior to the Real plan of 1994 and, thereafter, its steady decrease.

Suggested Citation

  • Ilan Goldfajn, 1998. "Public Debt Indexation and Denomination: The Case of Brazil," Working Papers Central Bank of Chile 27, Central Bank of Chile.
  • Handle: RePEc:chb:bcchwp:27
    as

    Download full text from publisher

    File URL: http://si2.bcentral.cl/public/pdf/documentos-trabajo/pdf/DTBC27A.PDF
    Download Restriction: no

    File URL: http://si2.bcentral.cl/public/pdf/documentos-trabajo/pdf/DTBC27B.PDF
    Download Restriction: no

    File URL: http://si2.bcentral.cl/public/pdf/documentos-trabajo/pdf/DTBC27C.PDF
    Download Restriction: no

    Other versions of this item:

    Citations

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


    Cited by:

    1. Rubens Penha Cysne, 2007. "Public debt indexation and denomination, the case of Brazil: a comment," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 12(4), pages 417-425.
    2. Anastasia Guscina, 2008. "Impact of Macroeconomic, Political, and Institutional Factors on the Structure of Government Debt in Emerging Market Countries," IMF Working Papers 08/205, International Monetary Fund.
    3. Alessandro Missale & Francesco Giavazzi, 2003. "Public Debt Management in Brazil," Development Working Papers 178, Centro Studi Luca d'Agliano, University of Milano.
    4. Martin Melecky, 2012. "Choosing The Currency Structure Of Foreign‐Currency Debt: A Review Of Policy Approaches," Journal of International Development, John Wiley & Sons, Ltd., vol. 24(2), pages 133-151, March.
    5. Rene Coppe Pimentel & Taufiq Choudhry, 2014. "Stock Returns Under High Inflation and Interest Rates: Evidence from the Brazilian Market," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 50(1), pages 71-92, January.
    6. Goldfajn, Ilan & Silveira, Marcos Antonio, 2002. "Should government smooth exchange rate risk?," Journal of Development Economics, Elsevier, vol. 69(2), pages 393-421, December.
    7. Melecky, Martin, 2012. "Formulation of public debt management strategies: An empirical study of possible drivers," Economic Systems, Elsevier, vol. 36(2), pages 218-234.
    8. Celasun, Oya, 2006. "Sticky inflation and the real effects of exchange rate-based stabilization," Journal of International Economics, Elsevier, vol. 70(1), pages 115-139, September.
    9. Fausto Hernández Trillo & Alejandro Villagómez Amezcua, 2000. "La estructura de la deuda pública en México: Lecciones y perspectivas," IDB Publications (Working Papers) 2108, Inter-American Development Bank.

    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:chb:bcchwp:27. 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: (Claudio Sepulveda). General contact details of provider: http://edirc.repec.org/data/bccgvcl.html .

    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.