Arbeitspapier
Public debt and changing inflation targets
What are the effects of a higher central bank inflation target on the burden of real public debt? Several recent proposals have suggested that even a moderate increase in the inflation target can have a pronounced effect on real public debt. We consider this question in a New Keynesian model with a maturity structure of public debt and an imperfectly observed inflation target. We find that moderate changes in the inflation target only have significant effects on real public debt if they are essentially permanent. Moreover, the additional benefits of not communicating a change in the inflation target are minor.
- ISBN
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978-3-86558-890-6
- Language
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Englisch
- Bibliographic citation
-
Series: Bundesbank Discussion Paper ; No. 06/2013
- Classification
-
Wirtschaft
Price Level; Inflation; Deflation
Monetary Policy
National Debt; Debt Management; Sovereign Debt
- Subject
-
public debt
learning
inflation target
callable perpetuity
debt maturity
- Event
-
Geistige Schöpfung
- (who)
-
Krause, Michael U.
Moyen, Stéphane
- Event
-
Veröffentlichung
- (who)
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Deutsche Bundesbank
- (where)
-
Frankfurt a. M.
- (when)
-
2013
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Krause, Michael U.
- Moyen, Stéphane
- Deutsche Bundesbank
Time of origin
- 2013
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