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- Title
ON MATURITY MEASURES OF THE PUBLIC DEBT.
- Authors
Luckett, Dudley G.
- Abstract
The article examines the adequacy of the average maturity as a suitable measure of debt's impact on economic stability and presents a theory of the economic consequences of public debt. Debt management--decisions concerning the maturity structure of the public debt--has come to be regarded as a potentially useful counter-cyclical device analogous to, if not so powerful as, monetary and fiscal policy. The usual statement of this view is that shortening the average maturity of the outstanding public debt is a stimulus to aggregate economic activity, while a lengthening of the debt's average maturity is an economic depressant. It examines the measures of the debt by defining a marginal moneyness function, which relates the marginal moneyness of the various securities with their respective maturities. The nature of the marginal moneyness function lies at the heart of debt management policy. Depending upon its shape and position, debt management will be effective or ineffective, expensive or inexpensive.
- Subjects
PUBLIC debts; MATURITY (Finance); ACCOUNTS payable; DEFICIT financing; PUBLIC finance; ECONOMIC impact
- Publication
Quarterly Journal of Economics, 1964, Vol 78, Issue 1, p148
- ISSN
0033-5533
- Publication type
Article
- DOI
10.2307/1880550