balance sheet effects and is therefore less effective in countries with high domestic corporate short-term debt; (ii) is more … effective in countries with high external debt; and (iv) is less effective in countries with high capital account openness. We …

Leith and Wren-Lewis (2007) have shown that government debt is returned to its pre-shock level in a New Keynesian model … under optimal discretionary policy. This has two important implications for monetary and fiscal policy. First, in a high-debt …

control of inflation. We then add endogenous public debt and show that the above result is no longer true. When the initial … stock of debt is low, it is optimal for government spending to remain largely inactive, but when the initial stock of debt …

models (which include the current account) might be unstable because of the cumulation of debt service obligations, and that …

We present a model of the maturity of a bank's uninsured debt. The bank borrows funds and chooses afterwards the … riskiness of its assets. This moral hazard problem leads to an excessive level of risk. Short-term debt may have a disciplining … under which short-term and long-term debt are feasible, and show circumstances under which only short-term debt is feasible …

. First, fiscal policy responds to the ratio of public debt to output in a stabilizing manner. Second, coordinated …

, now show up in the behaviour of the public debt. Unless the primary (non-interest) government deficit is permitted to … respond to these shocks, the public debt is likely to rise (or fall) to unsustainable levels. The idealized gold standard …

nominal debt into the present value of real primary budget surpluses of the government. We here argue that the logic of the … fiscal theory fails when at least part of the public debt takes the form of securities of infinite maturity. Indeed, no … equilibrium restriction prevents the occurrence of a speculative bubble on long-term public debt, so as to balance public budget …