Buybacks of Domestic Debt in Public Debt Management

Silvia Marchesi

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: In the model a fiscal stabilisation is announced under asymmetry of information between the government and the private investors. The government could be of two types: a dry type and a wet type, according to the amount of spending cuts it decides to make. Private investors may thus lack confidence in the stabilisation program and interest rates would be too high, reflecting this lack of credibility. A dry type which has to finance new spending may want to signal its resolution (type) in order to lower its interest costs and one way to do that would be to repurchase a fraction of the outstanding debt.

Keywords: DEBT; MANAGEMENT; INFORMATION (search for similar items in EconPapers)
JEL-codes: E62 G28 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2000
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https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2008/twerp573.pdf

Related works:
Journal Article: Buybacks of domestic debt in public debt management (2006)
Working Paper: Buybacks of domestic debt in public debt management (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:573

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