Faraglia, Elisa; Marcet, Albert; Scott, Andrew - Barcelona Graduate School of Economics (Barcelona GSE) - 2008
A growing literature integrates theories of debt management into models of optimal fiscal policy. One promising theory … changes in expected future deficits. This complete market approach to debt management is valid even when the government only … approach to debt management. Given the limited variability of the yield curve using maturities is a poor way to substitute for …