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http://hdl.handle.net/10419/51311
  
Title:Strategic debt management within the stability and growth pact PDF Logo
Authors:Sieg, Gernot
Stegemann, Ulrike
Issue Date:2009
Series/Report no.:Economics Department Working Paper Series 5
Abstract:Opportunistic politicians use the composition of public debt as a signal for competence. A competent government will not issue long-term nominal debt, as optimal to balance the budget, but long-term inflation-indexed debt. We consider politicians that pursue the objective of a balanced budget subject to the Stability and Growth Pact and reelection. A government's competence is reflected by its ability to produce a public service at a lower cost (taxes). Competence is private information of politicians.
Subjects:Political Budget Cycle
Debt Management
Inflation-indexed Bonds
Stability and Growth Pact
JEL:D72
H63
E32
Document Type:Working Paper
Appears in Collections:Economics Department Working Paper Series, TU Braunschweig

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