00000nam 2200000za 4500 9.859856 CaOODSP 20221107160341 cr ||||||||||| 180731s2018 oncd ob f000 0 eng d CaOODSP eng eng fre FB3-5/2018-38E-PDF Matveev, Dmitry. Time-consistent management of a liquidity trap with government debt [electronic resource] / by Dmitry Matveev. [Ottawa] : Bank of Canada, 2018. ii, 40, [5] p. : charts (some col.) Bank of Canada staff working paper, 1701-9397 ; 2018-38 "July 2018." Includes bibliographical references (p. 32-34). "This paper studies optimal discretionary monetary and fiscal policy when the lower bound on nominal interest rates is occasionally binding in a model with nominal rigidities and long-term government debt. At the lower bound it is optimal for the government to temporarily reduce debt. This decline stimulates output, which is inefficiently low during liquidity traps, by lowering expected real interest rates following the lift-off of the nominal rate from the lower bound. Away from the lower bound, the long-run level of government debt increases with the risk of reaching the lower bound. The accumulation of debt pushes up inflation expectations so as to offset the opposite effect due to the lower bound risk"--Abstract, p. ii. Includes abstract in French. gccst Monetary policy gccst National debt gccst Debt management Bank of Canada. Staff working paper (Bank of Canada) 1701-9397 ; 2018-38. (CaOODSP)9.806221 PDF 1.90 MB https://publications.gc.ca/collections/collection_2018/banque-bank-canada/FB3-5-2018-38-eng.pdf