Public debt, public debt markets and monetary policy in Colombia

This paper proposes a theory of the fiscal foundations of inflation based on imperfect knowledge and learning. Because imperfect knowledge breaks Ricardian equivalence, the scale and composition of the public debt matter for inflation. High and moderate duration debt generates wealth effects on consumption demand that impairs the intertemporal substitution channel of monetary policy: aggressive monetary policy is required to anchor inflation expectations. Counterfactual experiments conducted in an estimated model reveal that the US economy would have been substantially more volatile over the Great Inflation and Great Moderation periods if US debt levels had been those observed in Italy or Japan. (JEL D84, E31, E32, E52, E62, H63)

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Public Debt Markets for Shipping

The International Handbook of Shipping Finance ◽

10.1057/978-1-137-46546-7_6 ◽

2016 ◽

pp. 147-168

Author(s):

Basil M. Karatzas

Keyword(s):

Public Debt ◽

Debt Markets

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Politics, Direct Investment, Public Debt Markets, and the Shadow Economy

The Oxford Handbook of Public Choice, Volume 2 ◽

10.1093/oxfordhb/9780190469771.013.34 ◽

2019 ◽

pp. 683-696

Author(s):

Friedrich Schneider

Keyword(s):

Informal Sector ◽

Political Institutions ◽

Public Debt ◽

Sovereign Debt ◽

Direct Investment ◽

Shadow Economy ◽

Debt Crisis ◽

Policy Implications ◽

Debt Markets

The chapter first considers the role of politics on the size of the shadow economy and how it is affected by political institutions. Second, it investigates the role of the informal sector on direct investment and public debt markets in the “official” economy. The informal sector has significant adverse effects on credit ratings, lending costs, and investment decisions. This has policy implications, especially in the context of the ongoing sovereign debt crisis, since it suggests that, if politics succeed in reducing the informal sector of financially challenged countries, this is likely to reduce credit risk concerns, cutting down lending costs, and stimulating investment.

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