Why Should Governments Issue Bonds?

David Romer

Journal of Money, Credit and Banking, 1993, vol. 25, issue 2, 163-75

Abstract: This paper has three purposes. First, it shows that several recent arguments that the optimal nominal interest rate on government bonds is zero even when second best considerations are accounted for rest on perfect substitutes assumptions. Second, it characterizes the conditions under which the issue of interest-bearing bonds is desirable once these assumptions are relaxed. And third, it shows that these potential microeconomic benefits of bond issue are closely related to traditional macroeconomic analyses of the government's choice between money and bond finance. Copyright 1993 by Ohio State University Press.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-2879%2819930 ... 0.CO%3B2-G&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:25:y:1993:i:2:p:163-75

Access Statistics for this article

Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().