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Faculty of Economics

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Faraglia, E., Marcet, A. and Scott, A.

Fiscal insurance and debt management in OECD economies

The Economic Journal

Abstract: Assuming the role of debt management is to provide hedging against fiscal shocks we consider: (i) what indicators can be used to assess the performance of debt management? (ii) how well historical debt management policies have performed (iii) how performance is affected by variations in debt issuance, using OECD data between 1970 and 2000. We propose performance indicators for debt management, which we evaluate using Monte Carlo analysis. Those based on the relative persistence of debt perform best. There is only limited evidence that debt management has helped insulate policy against unexpected fiscal shocks. The degree of fiscal insurance achieved is not well connected to cross-country variations in debt issuance patterns.

Author links: Elisa Faraglia  

Publisher's Link: http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0297.2007.02125.x/abstract



Papers and Publications



Recent Publications


Carvalho, V. M. and Grassi, B. Large Firm Dynamics and the Business Cycle American Economic Review [2019]

Faraglia, E., Marcet, A., Oikonomou, R. and Scott, A. Government Debt management: the Short and the Long of it Review of Economic Studies, accepted [2018]

Elliott, M. and Golub, B. A network approach to public goods accepted, Journal of Political Economy [2018]