Inflating Away the Public Debt? An Empirical Assessment

Jens Hilscher, Alon Raviv and Ricardo Reis

The Review of Financial Studies, 2022, vol. 35, issue 3, 1553-1595

Abstract: This paper proposes a new method for measuring the impact of inflation on the real value of public debt. The distribution of debt debasement is based on two inputs: the distribution of privately held nominal debt by maturity, for which we provide new estimates, and the distribution of risk-adjusted inflation dynamics, for which we provide a novel copula estimator using options data. We find that inflation by itself is unlikely to lower the U.S. fiscal burden significantly because debt is concentrated at short maturities and perceived inflation shocks have little short-run persistence and are small.

JEL-codes: E31 E64 G12 G18 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://hdl.handle.net/10.1093/rfs/hhab018 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Inflating away the public debt? An empirical assessment (2022)
Working Paper: Inflating Away the Public Debt? An Empirical Assessment (2014)
Working Paper: Inflating Away the Public Debt? An Empirical Assessment (2014)
Working Paper: Inflating Away the Public Debt? An Empirical Assessment (2014)
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:rfinst:v:35:y:2022:i:3:p:1553-1595.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Review of Financial Studies is currently edited by Itay Goldstein

More articles in The Review of Financial Studies from Society for Financial Studies Oxford University Press, Journals Department, 2001 Evans Road, Cary, NC 27513 USA.. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().