Public Debt and Monetary Stability

Debt, Financial Stability, and Public Policy

Most major types of debt have grown rapidly in recent years. The most publicized aspect of the overall growth in debt has been the unprecedented size of federal government budget deficits. But debt of households and businesses has also grown rapidly, and the debt of developing countries has risen so much that exceptional efforts by international lending agencies, creditors in developed countrie...

Monetary policy , debt and unem - ployment

It can scarcely have escaped the attention of those who follow monetary policy in Sweden that the members of the Executive Board have held differing opinions for some time now. Most people have probably also noted that a minority of the Executive Board members – consisting of my colleague Karolina Ekholm and myself, in case anyone was not aware of this – has advocated a more expansionary moneta...

Fiscal policy, public debt and monetary policy in EMEs: an overview

Since the beginning of 2000s, however, the role of fiscal and monetary policy has started to become more active. Fiscal deficits and public debt levels in EMEs as a whole have declined substantially. Domestic financing has increased, and the share of foreign currency debt has fallen dramatically. And the average public debt maturity has lengthened significantly. What do these developments mean ...

Optimal Monetary and Fiscal Policy in an Economy with Endogenous Public Debt

This paper uses a New Keynesian framework to study the coordination of fiscal and monetary policies, in response to an inflation shock when the policymaker acts with commitment. We first show that, in the simplest New Keynesian model, fiscal policy plays no part in the optimal policy response, because of the comparative advantage which monetary policy has in the control of inflation. We the...

On Monetary Stability and Monetary Reform