Fiscal Policy with Noncontingent Debt and the Optimal Maturity Structure
George-Marios Angeletos
The Quarterly Journal of Economics, 2002, vol. 117, issue 3, 1105-1131
Abstract:
How should the tax rate and the level of public debt adjust to an adverse fiscal shock? What is the optimal maturity structure of public debt? If the maturity structure is carefully chosen, the ex post variation in the market value of public debt can cover the government against the need to raise taxes or debt if fiscal conditions should turn bad. In general, almost every Arrow-Debreu allocation can be implemented with noncontingent debt of different maturities. In a stylized example, the optimal policy is implemented by selling a perpetuity and investing in a short-term asset.
Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (203)
Downloads: (external link)
http://hdl.handle.net/10.1162/003355302760193977 (application/pdf)
Access to full text is restricted to subscribers.
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:oup:qjecon:v:117:y:2002:i:3:p:1105-1131.
Ordering information: This journal article can be ordered from
https://academic.oup.com/journals
Access Statistics for this article
The Quarterly Journal of Economics is currently edited by Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer and Stefanie Stantcheva
More articles in The Quarterly Journal of Economics from President and Fellows of Harvard College
Bibliographic data for series maintained by Oxford University Press ().