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dc.contributor.authorBacchiocchi, Emanueleen_US
dc.contributor.authorMissale, Alessandroen_US
dc.date.accessioned2009-01-28T15:52:38Z-
dc.date.available2009-01-28T15:52:38Z-
dc.date.issued2005en_US
dc.identifier.urihttp://hdl.handle.net/10419/18752-
dc.description.abstractThis paper presents a simple model in which debt management stabilizes the debt-to-GDP ratio in face of shocks to real returns and output growth and thus supports fiscal restraint in ensuring sustainability. The optimal composition of public debt is derived by looking at the relative impact of the risk and cost of alternative debt instruments on the cost of missing the stabilization target. The optimal debt structure is a function of the expected return differentials between debt instruments, of the conditional variance of their returns and of the conditional covariances of their returns with output growth and inflation. We then explore how the relevant covariances and thus the optimal choice of debt instruments depend on the monetary regime and on Central Bank preferences for output stabilization, inflation control and interestrate smoothing. Finally, we estimate the composition of public debt that would have supported debt stabilization in OECD countries over the last two decades. The empirical evidence suggests that the public debt should have a long maturity and a large share of it should be indexed to the price level.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesCESifo working papers 1388en_US
dc.subject.jelH63en_US
dc.subject.jelE63en_US
dc.subject.ddc330en_US
dc.subject.keyworddebt managementen_US
dc.subject.keyworddebt structureen_US
dc.subject.keyworddebt stabilizationen_US
dc.subject.keywordinflation indexationen_US
dc.subject.keywordinterest ratesen_US
dc.subject.stwDebt Managementen_US
dc.subject.stwÖffentliche Schuldenen_US
dc.subject.stwSozialprodukten_US
dc.subject.stwLaufzeiten_US
dc.subject.stwIndexierungen_US
dc.subject.stwSchätzungen_US
dc.subject.stwOECD-Staatenen_US
dc.titleManaging debt stabilityen_US
dc.typeWorking Paperen_US
dc.identifier.ppn479271100en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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