Debt Management Objectives for a Small Open Economy

Boothe, Paul; Reid, Bradford G.

doi:10.2307/1992790

Cited by 9 publications

(4 citation statements)

References 7 publications

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“…However, the transactions costs involved in implementing such a strategy may be lower than for direct hedging. Boothe and Reid (1992) and Missale and Blanchard (1994) also discuss the scope for reducing the costs of debt servicing by varying the maturity structure appropriately.…”

Section: Implementation Issuesmentioning

confidence: 99%

Using Financial Market Information to Enhance Canadian Fiscal Policy

Lloyd-Ellis,

Zhu

2006

Public Finance and Management

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In this article we argue that the evaluation and implementation of Canadian fiscal policy could be significantly improved through the systematic use of information provided by global financial markets. in particular, we show how the information contained in internationally traded asset returns can be used to (1) provide a more meaningful cyclical-adjustment of the budget deficit, (2) assess the sustainability of the public debt, and (3) reduce the risk of the debt becoming unsustainable without having to run excessively large surpluses.

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Section: Implementation Issuesmentioning

confidence: 99%

Using Financial Market Information to Enhance Canadian Fiscal Policy

Lloyd-Ellis,

Zhu

2006

Public Finance and Management

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“…Another possible model is the cost minimisation model. Boothe and Reid (1992) examine the consequences of using cost minimisation as the goal of public debt management in a small open economy. Authorities are assumed to minimise interest costs subject to constraints on their ability to refinance at different maturities, and the information conditioning expectations of future interest rates.…”

Section: Implications O F Th E Balance-shee T Approac Hmentioning

confidence: 99%

Effective Domestic Debt Management in Developing Countries

1999

Debt Management

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“…The actual optimal debt maturity structure would be based on higher frequency data than annual census numbers. Boothe and Reid (1992) examine the maturity structure of marketable Canadian government bonds within the context of a small open economy. A small open economy implies that it is not possible to use debt management as a macroeconomic tool.…”

Section: Introductionmentioning

confidence: 99%

A Surplus Optimization Approach to Managing Municipal Debt

Brooks

2005

Public Finance Review

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This article considers appropriate debt-funding strategies for state and municipal governments in the presence of a positive, tax-exempt term premium. In this context, the term premium measures the additional expected funding cost from issuing fixed-rate debt as opposed to issuing floating-rate debt. The correlation between a measure of income from rate-sensitive assets and the tax-exempt floating rate is the principal focus of the analysis. A single-period framework is used to identify the most important information required to design the optimal proportion of tax-exempt floating-rate debt for a municipal government. From this analysis, there are several compelling reasons for municipal entities to increase the quantity of floating-rate debt. This framework is used to assess the optimal state government debt maturity structure based on historical data.

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Debt Management Objectives for a Small Open Economy

Cited by 9 publications

References 7 publications

Using Financial Market Information to Enhance Canadian Fiscal Policy

Using Financial Market Information to Enhance Canadian Fiscal Policy

Effective Domestic Debt Management in Developing Countries

A Surplus Optimization Approach to Managing Municipal Debt

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