A normative argument towards the independence of public debt management

Panagiotis Tsintzos, Tilemahos Efthimiadis, Stephanos Papadamou and Eleftherios Spyromitros
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Panagiotis Tsintzos: "University of Thessaly, Volos, Greece"
Tilemahos Efthimiadis: "European Commission, Joint Research Centre (JRC), Petten, the Netherlands"
Stephanos Papadamou: "University of Thessaly, Volos, Greece"
Eleftherios Spyromitros: "Democritus University of Thrace, Komotini, Greece"

Review of Economic Analysis, 2023, vol. 15, issue 2, 127-137

Abstract: "We explore the links between credit expansion, inflation, and inflation expectations, and show that active public debt management can trigger a non-interest rate channel of credit expansion. This creates incentives for the government to use debt management for promoting non-debt management goals, thus, choosing debt maturity structure that differs from its optimal. Through a theoretical monetary policy game, we show that it is welfare improving to delegate public debt management to an independent office separate from the fiscal authority."

Keywords: "macroprudential policy; fiscal policy; central banks; public debt" (search for similar items in EconPapers)
JEL-codes: E60 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ren:journl:v:15:y:2023:i:2:p:127-137

DOI: 10.15353/rea.v15i2.4928

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