Managing the Public Debt in Fiscal Stabilizations: The Evidence
This paper provides evidence on the behavior of public debt managers during fiscal" stabilizations in OECD countries over the last two decades. We find that debt maturity tends to" lengthen the more credible the program, the lower the long-term interest rate and the higher the" volatility of short-term interest rates. We show that this debt issuing strategy is consistent with" optimal debt management if information between the government and private investors is" asymmetric, as is usually the case at the outset of a stabilization attempt when private investors" may lack full confidence in the announced budget cuts.
|Date of creation:||Dec 1997|
|Date of revision:|
|Publication status:||Published as "Managing the Public Debt: The Optimal Taxation Approach", JES, Vol. 11, no. 3 (September 1997): 235-265.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Calvo, Guillermo A, 1988. "Servicing the Public Debt: The Role of Expectations," American Economic Review, American Economic Association, vol. 78(4), pages 647-61, September.
- Robert J. Barro, 1995. "Optimal Debt Management," NBER Working Papers 5327, National Bureau of Economic Research, Inc.
- F. Giavazzi & M. Pagano, 1989.
"Confidence Crises and Public Debt Management,"
73, Dipartimento Scienze Economiche, Universita' di Bologna.
- Giavazzi, Francesco & Pagano, Marco, 1989. "Confidence Crises and Public Debt Management," CEPR Discussion Papers 318, C.E.P.R. Discussion Papers.
- Francesco Giavazzi & Marco Pagano, 1989. "Confidence Crises and Public Debt Management," NBER Working Papers 2926, National Bureau of Economic Research, Inc.
- Manmohan S. Kumar & Pablo Emilio Guidotti, 1991. "Domestic Public Debt of Externally Indebted Countries," IMF Occasional Papers 80, International Monetary Fund.
- Rudiger Dornbusch, 1991.
"Credibility and Stabilization,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 106(3), pages 837-850.
- Alesina, A. & Prati, A. & Tabellini, G., 1989.
"Public Confidence And Debt Management: A Model And A Case Study Of Italy,"
5, California Los Angeles - Applied Econometrics.
- Alberto Alesina & Alessandro Prati & Guido Tabellini, 1989. "Public Confidence and Debt Management: A Model and A Case Study of Italy," NBER Working Papers 3135, National Bureau of Economic Research, Inc.
- Alesina, Alberto F & Prati, Alessandro & Tabellini, Guido, 1989. "Public Confidence and Debt Management: A Model and a Case Study of Italy," CEPR Discussion Papers 351, C.E.P.R. Discussion Papers.
- John Y. Campbell, 1995.
"Some Lessons from the Yield Curve,"
Harvard Institute of Economic Research Working Papers
1713, Harvard - Institute of Economic Research.
- Bohn, Henning, 1990. "Tax Smoothing with Financial Instruments," American Economic Review, American Economic Association, vol. 80(5), pages 1217-30, December.
- Bohn, Henning, 1990.
"A positive theory of foreign currency debt,"
Journal of International Economics,
Elsevier, vol. 29(3-4), pages 273-292, November.
- Henning Bohn, . "A Positive Theory of Foreign Currency Debt," Rodney L. White Center for Financial Research Working Papers 19-88, Wharton School Rodney L. White Center for Financial Research.
- Alessandro Missale & Olivier Jean Blanchard, 1991.
"The Debt Burden and Debt Maturity,"
NBER Working Papers
3944, National Bureau of Economic Research, Inc.
- Bohn, Henning, 1988. "Why do we have nominal government debt?," Journal of Monetary Economics, Elsevier, vol. 21(1), pages 127-140, January.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:6311. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.