Boosting Fiscal Space

Can debt management policy provide a way to increase fiscal space for a given path of primary fiscal balances? This note explores the role of two such policies: issuance of state-contingent debt; and issuance of longer maturity debt. New analytical models determine the debt limit and the default ris...

Full description

Main Author: Ostry, Jonathan David
Other Authors: Kim, Jun Il
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2018, 2018
Series:Departmental Papers / Policy Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Summary:Can debt management policy provide a way to increase fiscal space for a given path of primary fiscal balances? This note explores the role of two such policies: issuance of state-contingent debt; and issuance of longer maturity debt. New analytical models determine the debt limit and the default risk under uncertainty, and undertake numerical simulations to gauge the practical significance of the effect of debt management policies on fiscal space. The results suggest that, by managing debt along these two dimensions, economically salient gains in fiscal space are plausible for advanced and emerging markets
Physical Description:47 p.
ISBN:1484330935
9781484330937