The Library
Public debt management and the interaction between fiscal and monetary policies
Tools
Tools
Tools
Nobrega, Wellington Charles Lacerda, Besarria, Cássio da Nóbrega and Aragón, Edilean Kleber da Silva Bejarano (2022) Public debt management and the interaction between fiscal and monetary policies. Journal of Economic Studies, 49 (6). pp. 1092-1116. doi:10.1108/JES-01-2021-0012 ISSN 1758-7387.
Research output not available from this repository.
Request-a-Copy directly from author or use local Library Get it For Me service.
Official URL: http://dx.doi.org/10.1108/JES-01-2021-0012
Abstract
Purpose
This paper aims to investigate the existing relations between the management of public bonds on the dynamics of debt, term structure of interest rates and economic cycle, through a dynamic stochastic general equilibrium model (DSGE), which was estimated through Bayesian inference techniques using data from Brazil.
Design/methodology/approach
The model developed was used to investigate the effects of the public debt average maturity management when the economy faces a monetary policy shock. For this, three management scenarios are evaluated, including Brazilian securities average term.
Findings
Contrary to what might be inferred from DSGE models that limited the analysis of the debt term by imposing only one-period bonds, a contractionary monetary policy shock does not necessarily cause public debt to increase significantly. Debt term structure plays a crucial role in this result since the government does not need to roll the debt over at higher costs when the debt term profile is longer, reducing the debt service costs and then the impact on the overall debt.
Originality/value
Despite the relevance of this theme and its implications for the dynamics of the economy, there is still a gap to be filled in the literature when using DSGE models, since most part of the work that used this methodology limited the analysis of the debt term by imposing that government issues only one-period bonds. This paper differs from the others insofar as it promotes an investigation focused on the role played by debt maturity management on the performance of the contractionary monetary policy. This approach can generate a better understanding of debt management policy and its interaction with fiscal and monetary policies.
| Item Type: | Journal Article | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||||
| Journal or Publication Title: | Journal of Economic Studies | ||||||||
| Publisher: | Emerald Group Publishing Ltd. | ||||||||
| ISSN: | 1758-7387 | ||||||||
| Official Date: | 2022 | ||||||||
| Dates: |
|
||||||||
| Volume: | 49 | ||||||||
| Number: | 6 | ||||||||
| Page Range: | pp. 1092-1116 | ||||||||
| DOI: | 10.1108/JES-01-2021-0012 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| Copyright Holders: | Copyright © 2021, Emerald Publishing Limited |
Request changes or add full text files to a record
Repository staff actions (login required)
 |
View Item |
