Management of the Nominal Public Debt Theory and Applications

By Pablo Emilio Guidotti, Guillermo Calvo

December 1, 1990

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Pablo Emilio Guidotti, and Guillermo Calvo. Management of the Nominal Public Debt Theory and Applications, (USA: International Monetary Fund, 1990) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Optimal management of the public debt is explored in a context where economic policy is continuously revised because, when the public debt is non—indexed, policy—makers are tempted to use inflation in order to reduce the real value of the public debt. The model’s implications are explored following two approaches. First, the effects of various exogenous disturbances are examined by means of numerical simulations. Secondly, the analysis explores—for Italy, Ireland, and the United States—if the model’s implications concerning the maturity structure of government debt are consistent with actual experience.

Subject: Expenditure, Government debt management, Inflation, Prices, Public debt, Public financial management (PFM), Revenue administration, Tax arrears management

Keywords: Debt aversion, Debt level, Debt maturity, Debt policy, Debt repayment, Government debt management, Government debt obligation, Inflation, Inflation rate, Maturity composition, Maturity structure, Tax arrears management, WP

Publication Details

Pages:

42
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1990/115
Stock No:

WPIEA1151990
ISBN:

9781451942798
ISSN:

1018-5941

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