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Controlling Inflation The Problem of Non-Indexed Debt

We show that the presence of nominal non-indexed government debt could give rise to more than one equilibrium inflation rate. Conditions for this to occur are discussed in terms of ad hoc and micro-founded models. Solutions to the indeterminacy problem are examined; one solution is shown to be price...

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Bibliographic Details
Corporate Author: International Monetary Fund
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1988
Series:IMF Working Papers
Subjects:
International Lending And Debt Problems
Banks And Banking
Price Level
Government Debt Management
Exports And Imports
Interest Rates
Deflation
Debts, Public
Macroeconomics
Debt Service
Real Interest Rates
Finance
Debt
Financial Services
Inflation
Sovereign Debt
Debt Management
Interest Rates: Determination, Term Structure, And Effects
Public Debt
Public Finance
International Economics
Public Finance & Taxation
Public Financial Management (pfm)
Prices
External Debt
Argentina
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:We show that the presence of nominal non-indexed government debt could give rise to more than one equilibrium inflation rate. Conditions for this to occur are discussed in terms of ad hoc and micro-founded models. Solutions to the indeterminacy problem are examined; one solution is shown to be price indexation of debt instruments
Physical Description:28 pages
ISBN:9781451980578

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