The procyclicality of inflation-linked debt

Gabor Pinter

Economics Letters, 2022, vol. 218, issue C

Abstract: The share of inflation-linked debt in total public debt is procyclical in the UK and US. Controlling for breakeven inflation, the linker share is positively related to inflation. Tax-smoothing incentives of the government in a Ramsey model can explain this.

Keywords: Government debt portfolio; Optimal fiscal policy; Inflation-linked bonds (search for similar items in EconPapers)
JEL-codes: E31 E62 G11 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:218:y:2022:i:c:s0165176522002415

DOI: 10.1016/j.econlet.2022.110706

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