Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/18752 
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dc.contributor.authorBacchiocchi, Emanueleen
dc.contributor.authorMissale, Alessandroen
dc.date.accessioned2009-01-28T15:52:38Z-
dc.date.available2009-01-28T15:52:38Z-
dc.date.issued2005-
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
dc.language.isoengen
dc.publisher|aCenter for Economic Studies and ifo Institute (CESifo) |cMunichen
dc.relation.ispartofseries|aCESifo Working Paper |x1388en
dc.subject.jelH63en
dc.subject.jelE63en
dc.subject.ddc330en
dc.subject.keyworddebt managementen
dc.subject.keyworddebt structureen
dc.subject.keyworddebt stabilizationen
dc.subject.keywordinflation indexationen
dc.subject.keywordinterest ratesen
dc.subject.stwDebt Managementen
dc.subject.stwÖffentliche Schuldenen
dc.subject.stwSozialprodukten
dc.subject.stwLaufzeiten
dc.subject.stwIndexierungen
dc.subject.stwSchätzungen
dc.subject.stwOECD-Staatenen
dc.titleManaging debt stability-
dc.typeWorking Paperen
dc.identifier.ppn479271100en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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