Coordinating Public Debt Management with Fiscal and Monetary Policies: An Analytical Framework

37 Pages Posted: 10 Dec 2007

Date Written: September, 2007

Abstract

This paper proposes a sovereign asset and liability management framework for analyzing the inter-relationships between debt management, fiscal and monetary policies. It illustrates the consequences of uncoordinated policy mix and extends Sargent and Wallace (1981 and 1993) by including debt management. Examples of policy games played by fiscal, monetary, and debt management authorities reinforce the importance of policy separation and coordination to prevent domination by one authority over another which could lead to inconsistent policy mix.

Keywords: Debt management, asset liability management, fiscal policy, monetary policy, debt, fiscal sustainability

JEL Classification: E61, H63

Suggested Citation

Togo, Eriko, Coordinating Public Debt Management with Fiscal and Monetary Policies: An Analytical Framework (September, 2007). World Bank Policy Research Working Paper No. 4369, Available at SSRN: https://ssrn.com/abstract=1068562

Eriko Togo (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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