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Technische Universität Braunschweig >
Institut für Volkswirtschaftslehre, Technische Universität Braunschweig >
Economics Department Working Paper Series, TU Braunschweig >
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http://hdl.handle.net/10419/51311
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| Title: | | Strategic debt management within the stability and growth pact  |
| 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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