Author: International Monetary Fund
Publisher: International Monetary Fund
Published: 1989-09-14
Total Pages: 28
ISBN-13: 1451958501
DOWNLOAD EBOOKThis paper focuses on the role of debt maturity in managing the government’s incentives to use opportunistic inflation to reduce the ex post real value of its nominal liabilities. The maturity structure of government debt is shown to be a powerful instrument to affect the time profile of the inflation tax base and, hence, to mitigate the distortions introduced by time inconsistency on taxation policies. The nature of the optimal policy is shown to be heavily dependent on the type of precommitment enjoyed by policymakers.
Book Synopsis Credibility and Nominal Debt by : International Monetary Fund
Download or read book Credibility and Nominal Debt written by International Monetary Fund and published by International Monetary Fund. This book was released on 1989-09-14 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper focuses on the role of debt maturity in managing the government’s incentives to use opportunistic inflation to reduce the ex post real value of its nominal liabilities. The maturity structure of government debt is shown to be a powerful instrument to affect the time profile of the inflation tax base and, hence, to mitigate the distortions introduced by time inconsistency on taxation policies. The nature of the optimal policy is shown to be heavily dependent on the type of precommitment enjoyed by policymakers.