The Impact of Debt Levels and Debt Maturity on Inflation

• 成果类型: Article
• 署名作者: Faraglia, Elisa; Marcet, Albert; Oikonomou, Rigas; Scott, Andrew
• 署名单位: University of Cambridge; Universite de Montreal; HEC Montreal; University of London; London Business School
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12015
• 发表日期: 2013
• 页码: F164-F192
• 关键词: monetary-policy

摘要

We examine the implications for optimal inflation of changes in the level and maturity of government debt under the assumption where fiscal and monetary policies co-ordinate, and in the case of an independent central bank following a Taylor rule. Under co-ordination, inflation persistence and volatility depend on the sign, size and maturity of debt. Higher debt leads to higher inflation and longer maturity leads to more persistent inflation although inflation plays a minor role in achieving fiscal sustainability. Under an independent monetary authority, inflation is higher, more volatile and more persistent and plays a significant role in achieving fiscal solvency.