G2TT
来源类型Discussion paper
规范类型论文
来源IDDP11089
DP11089 The "Mystery of the Printing Press" Monetary Policy and Self-fulfilling Debt Crises
Giancarlo Corsetti; Luca Dedola
发表日期2016-02-07
出版年2016
语种英语
摘要We study the conditions under which unconventional (balance-sheet)monetary policy can rule out self-fulfilling sovereign default in a model with optimizing but discretionary fiscal and monetary policymakers. When purchasing sovereign debt, the central bank effectively swaps risky government paper for monetary liabilities only exposed to inflation risk, thus yielding a lower interest rate. As central bank purchases reduce the (ex ante) costs of debt, we characterize a critical threshold beyond which, absent fundamental fiscal stress, the government strictly prefers primary surplus adjustment to default. Because default may still occur for fundamental reasons, however, the central bank faces the risk of losses on sovereign debt holdings, which may generate inefficient inflation. We show that these losses do not necessarily undermine the credibility of a backstop, nor the monetary authorities? ability to pursue its inflation objectives. Backstops are credible if either the central bank enjoys fiscal backing or fiscal authorities are sufficiently averse to inflation.
主题International Macroeconomics and Finance
关键词Inflationary financing Lender of last resort Seigniorage Sovereign risk and default
URLhttps://cepr.org/publications/dp11089
来源智库Centre for Economic Policy Research (United Kingdom)
资源类型智库出版物
条目标识符http://119.78.100.153/handle/2XGU8XDN/539918
推荐引用方式
GB/T 7714
Giancarlo Corsetti,Luca Dedola. DP11089 The "Mystery of the Printing Press" Monetary Policy and Self-fulfilling Debt Crises. 2016.
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