Managing the Public Debt in Fiscal Stabilizations: the Evidence

Missale, Alessandro and Giavazzi, Francesco and Benigno, Pierpaolo (1997) Managing the Public Debt in Fiscal Stabilizations: the Evidence. [Working Paper]. p. 21. IGIER Working Papers (No. 118).

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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 is the program, the lower is the long-term interest rate and the higher is the volatility of short-term interest rates. We show that this debt issuing strategy is consistent with optimal debt management if information bewteen the government and private investors is asymmetric, as it is usually the case at the outset of a stabilization attempt when private investors may lack full confidence in the announced budget cuts.

Item Type: Report / Paper (Working Paper)
Research documents and activity classification: Working Papers > Non-Refereed Working Papers / of national relevance only
Divisions: Department of Business and Management
Additional Information: The definitive version of this paper has been published as "Managing the Public Debt: The Optimal Taxation Approach", JES, Vol. 11, no. 3 (September 1997): 235-265.
MIUR Scientific Area: Area 13 - Economics and Statistics > SECS-P/01 Political Economy
Deposited by: Maria Teresa Nisticò
Date Deposited: 12 Nov 2010 14:43
Last Modified: 21 Apr 2015 23:13


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