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Coordinating public debt management with fiscal and monetary policies : an analytical framework

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  • Togo, Eriko

Abstract

This paper proposes a sovereign asset and liability management framework for analyzing the inter-relationships between debt management, fiscal and monetary policies. It illustrates the consequences of uncoordinated policy mix and extends Sargent and Wallace (1981 and 1993) by including debt management. Examples of policy games played by fiscal, monetary, and debt management authorities reinforce the importance of policy separation and coordination to prevent domination by one authority over another which could lead to inconsistent policy mix.

Suggested Citation

  • Togo, Eriko, 2007. "Coordinating public debt management with fiscal and monetary policies : an analytical framework," Policy Research Working Paper Series 4369, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4369
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    References listed on IDEAS

    as
    1. Graciela L. Kaminsky & Carmen M. Reinhart & Carlos A. Végh, 2005. "When It Rains, It Pours: Procyclical Capital Flows and Macroeconomic Policies," NBER Chapters,in: NBER Macroeconomics Annual 2004, Volume 19, pages 11-82 National Bureau of Economic Research, Inc.
    2. Graeme Wheeler, 2004. "Sound Practice in Government Debt Management," World Bank Publications, The World Bank, number 15017, September.
    3. Missale, Alessandro & Blanchard, Olivier Jean, 1994. "The Debt Burden and Debt Maturity," American Economic Review, American Economic Association, vol. 84(1), pages 309-319, March.
    4. Joshua Aizenman & Kenneth M. Kletzer & Brian Pinto, 2005. "Sargent-Wallace meets Krugman-Flood-Garber, or: why sovereign debt swaps do not avert macroeconomic crises," Economic Journal, Royal Economic Society, vol. 115(503), pages 343-367, April.
    5. Ernesto Talvi & Carlos A. Vegh, 2000. "Tax Base Variability and Procyclical Fiscal Policy," NBER Working Papers 7499, National Bureau of Economic Research, Inc.
    6. Bohn, Henning, 1991. "The Sustainability of Budget Deficits with Lump-Sum and with Income-Based Taxation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(3), pages 580-604, August.
    7. Robert J. Barro, 1999. "Notes on Optimal Debt Management," Journal of Applied Economics, Universidad del CEMA, vol. 2, pages 281-289, November.
    8. Dooley, Michael P., 2000. "Debt management and crisis in developing countries," Journal of Development Economics, Elsevier, vol. 63(1), pages 45-58, October.
    9. Alan S. Blinder, 1982. "Issues in the Coordination of Monetary and Fiscal Policy," NBER Working Papers 0982, National Bureau of Economic Research, Inc.
    10. Missale, Alessandro, 1997. " Managing the Public Debt: The Optimal Taxation Approach," Journal of Economic Surveys, Wiley Blackwell, vol. 11(3), pages 235-265, September.
    11. Bohn, Henning, 1995. "The Sustainability of Budget Deficits in a Stochastic Economy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(1), pages 257-271, February.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Faut-il nécessairement minimiser la charge d'intérêt de la dette?
      by contact@captaineconomics.fr (Le Captain') in Captain Economics on 2012-07-13 17:04:09

    Citations

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    Cited by:

    1. Melecky, Martin, 2012. "Formulation of public debt management strategies: An empirical study of possible drivers," Economic Systems, Elsevier, vol. 36(2), pages 218-234.
    2. Ministry of Finance, 2009. "Report of the Internal Working Group on Debt Management," Working Papers id:2111, eSocialSciences.
    3. Melecky, Martin, 2009. "The Effect of Institutions, Geography, Development Assistance and Debt Crises on Public-Debt Management," MPRA Paper 16332, University Library of Munich, Germany.

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