Optimal Fiscal And Monetary Policy Debt Crisis And Management
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Author | : Mr.Cristiano Cantore |
Publisher | : International Monetary Fund |
Total Pages | : 44 |
Release | : 2017-03-30 |
Genre | : Business & Economics |
ISBN | : 1475590199 |
Download Optimal Fiscal and Monetary Policy, Debt Crisis and Management Book in PDF, Epub and Kindle
The initial government debt-to-GDP ratio and the government’s commitment play a pivotal role in determining the welfare-optimal speed of fiscal consolidation in the management of a debt crisis. Under commitment, for low or moderate initial government debt-to-GPD ratios, the optimal consolidation is very slow. A faster pace is optimal when the economy starts from a high level of public debt implying high sovereign risk premia, unless these are suppressed via a bailout by official creditors. Under discretion, the cost of not being able to commit is reflected into a quick consolidation of government debt. Simple monetary-fiscal rules with passive fiscal policy, designed for an environment with “normal shocks”, perform reasonably well in mimicking the Ramsey-optimal response to one-off government debt shocks. When the government can issue also long-term bonds–under commitment–the optimal debt consolidation pace is slower than in the case of short-term bonds only, and entails an increase in the ratio between long and short-term bonds.
Author | : Michael T. Gapen |
Publisher | : International Monetary Fund |
Total Pages | : 40 |
Release | : 2003-11-01 |
Genre | : Business & Economics |
ISBN | : 1451875371 |
Download Optimal Fiscal and Monetary Policy with Nominal and Indexed Debt Book in PDF, Epub and Kindle
This paper highlights the importance of debt composition in setting optimal fiscal and monetary policy over short-run business cycles and in the long run. Nominal debt as state-contingent debt can be a significant policy tool to reduce the volatility of distortionary government policy, thereby reducing macroeconomic volatility while increasing equilibrium output and consumption. The welfare gain from using nominal debt to hedge against shocks to the government budget is as large as the welfare gain from the ability to issue debt.
Author | : International Monetary Fund |
Publisher | : International Monetary Fund |
Total Pages | : 33 |
Release | : 1998-03-01 |
Genre | : Business & Economics |
ISBN | : 1451844239 |
Download Coordination of Monetary and Fiscal Policies Book in PDF, Epub and Kindle
Recently, monetary authorities have increasingly focused on implementing policies to ensure price stability and strengthen central bank independence. Simultaneously, in the fiscal area, market development has allowed public debt managers to focus more on cost minimization. This “divorce” of monetary and debt management functions in no way lessens the need for effective coordination of monetary and fiscal policy if overall economic performance is to be optimized and maintained in the long term. This paper analyzes these issues based on a review of the relevant literature and of country experiences from an institutional and operational perspective.
Author | : Guillermo Calvo |
Publisher | : Springer |
Total Pages | : 307 |
Release | : 1998-02-12 |
Genre | : Business & Economics |
ISBN | : 1349260770 |
Download The Debt Burden and Its Consequences for Monetary Policy Book in PDF, Epub and Kindle
In all countries debt and deficits of the public sector are at the heart of economic policy debate. Debt and deficits pose major problems, all the more pressing in Europe because of the Maastricht criteria for entry into European Monetary Union. And in the developing world debt has been associated with major financial crises. This volume, arising from an International Economic Association conference at the Bundesbank, sees academics and policy makers debate the key issues and their implications in theory and practice.
Author | : Eriko Togo |
Publisher | : World Bank Publications |
Total Pages | : 37 |
Release | : 2012 |
Genre | : |
ISBN | : |
Download coordinating public debt management with fiscal and monetary policies: an analytical framework Book in PDF, Epub and Kindle
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.
Author | : Thomas F. Cosimano |
Publisher | : |
Total Pages | : 39 |
Release | : 2006 |
Genre | : |
ISBN | : |
Download Optimal Fiscal and Monetary Policy with Nominal and Indexed Debt Book in PDF, Epub and Kindle
This paper highlights the importance of debt composition in setting optimal fiscal and monetary policy over short-run business cycles and in the long run. Nominal debt as state-contingent debt can be a significant policy tool to reduce the volatility of distortionary government policy, thereby reducing macroeconomic volatility while increasing equilibrium output and consumption. The welfare gain from using nominal debt to hedge against shocks to the government budget is as large as the welfare gain from the ability to issue debt.
Author | : International Monetary Fund |
Publisher | : International Monetary Fund |
Total Pages | : 39 |
Release | : 2003-09-12 |
Genre | : Business & Economics |
ISBN | : 149832892X |
Download Guidelines for Public Debt Management -- Amended Book in PDF, Epub and Kindle
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Author | : Rudiger Dornbusch |
Publisher | : Cambridge University Press |
Total Pages | : 384 |
Release | : 1990-11-30 |
Genre | : Political Science |
ISBN | : 1139935860 |
Download Public Debt Management Book in PDF, Epub and Kindle
As Europe proceeds towards economic and monetary union, fiscal convergence and the prospect of a common money are at the centre of discussion. This volume from the Centre for Economic Policy Research brings together theoretical, applied and historical research on the management of public debt and its implications for financial stability. Gale fills a gap in the literature, using a consistent framework to investigate the welfare economics of public debt, while Calvo and Guidotti analyse the trade-off between indexation and maturity when it comes to minimizing debt service. Confidence crises have become relevant again in view of the high debt ratios in countries such as Belgium, Italy and Ireland. Alesina, Prati and Tabellini develop a formal model of the propagation of a debt run and use it to interpret Italian debt panics. Giavazzi and Pagano concentrate on how inappropriate debt management can precipitate a run on the currency while Makinen and Woodward review a broad sweep of historical experience.
Author | : Simon Wren-Lewis |
Publisher | : |
Total Pages | : |
Release | : 2007 |
Genre | : |
ISBN | : |
Download Optimal Fiscal Feedback on Debt in an Economy with Nominal Rigidities Book in PDF, Epub and Kindle
Author | : Mr.Udaibir S. Das |
Publisher | : International Monetary Fund |
Total Pages | : 29 |
Release | : 2010-12-01 |
Genre | : Business & Economics |
ISBN | : 1455210870 |
Download Managing Public Debt and Its Financial Stability Implications Book in PDF, Epub and Kindle
This paper explores the relationship between the level and management of public debt and financial stability, and explains the channels through which the two are interlinked. It suggests that the broader implications of a debt management strategy and its implementation should be carefully analyzed by debt managers and policy makers in terms of their impact on the government's balance sheet, macroeconomic developments, and the financial system.