Hidden Bibliographic Details
| Other authors / contributors: | International Monetary Fund.
|
|---|
| ISBN: | 1283515547
9781283515542
9781451910797
1451910797
9781451994384
1451994389
|
|---|
| ISSN: | 2227-8885
|
|---|
| Digital file characteristics: | data file
|
|---|
| Notes: | Cover title.
"March 2007."
Includes bibliographical references (pages 21-22).
Restrictions unspecified
Electronic reproduction. [S.l.] : HathiTrust Digital Library, 2010.
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212
English.
digitized 2010 HathiTrust Digital Library committed to preserve
|
|---|
| Summary: | This paper derives an interest rate rule for monetary policy in which the interest rate response of the central bank toward an increase in expected inflation falls as debts increase beyond a certain threshold level. A debt-constrained interest rate rule and the threshold level of debt are jointly estimated for Canada during the first decade of its inflation targeting regime of the 1990s. There are three main findings of this paper. First, a high government debt could constrain monetary policy if government spending, rather than taxes, is expected to adjust in future in line with debt service costs. The 'constraint' operates through an altered policy transmission mechanism through changes in the IS curve. Second, the effects of the debt-constraint on monetary policy are quite different during booms and recessions. Third, empirical estimates show that Canadian monetary policy might have been constrained by a high government debt-GDP ratio during the 1990s. Policy was less loose than what inflation indicators called for.
|
|---|
| Other form: | Print version: Mitra, Srobona. Is the quantity of government debt a constraint for monetary policy?. [Washington, D.C.] : International Monetary Fund, 2007
|
|---|
| Standard no.: | 10.5089/9781451910797.001
|
|---|
