How Do I Choose Legitimate Debt Management Help?

Public debt management policy was developed based on the concept of public debt management. Generally speaking, public debt management in the broad sense refers to a series of tasks such as decision-making, organization, planning, guidance, supervision, and adjustment around the operation of public debt. The specific content also includes management systems, bond ratings, anti-counterfeiting and other aspects The target includes both debt size and debt structure. The narrow definition of public debt management only refers to the adjustment measures made by the government's debt management agency to the public debt structure under a given scale.

Public debt management policy

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Public debt management policy was developed based on the concept of public debt management. Generally speaking, the management of public debt in a broad sense refers to a series of tasks such as decision-making, organization, planning, guidance, supervision and adjustment around the operation of public debt. The specific content also includes management systems,

Public debt management policy in the broad sense is what we usually call public debt policy. It includes both

The basic contents of the public debt management policy include the following four aspects: (1) When issuing new public debt, is it to issue long-term public debt or short-term public debt? How to mix long-term bonds with short-term bonds? (2) in

Since public debt management policies are inseparable from fiscal and monetary policies, they are also independent.

Public debt management policy is a policy system with multiple objectives. In practice, the many goals of public debt management are not completely parallel. For example, the government needs to raise ten-year debt funds. It has two operating plans. One is to issue ten-year long-term public bonds at one time. The second is to roll out three-month bonds within ten years.

Can Public Debt Management Become Macroeconomics Used by the Government to Regulate the Economy

Following the combination analysis method pioneered by Tobin, many economists in the future have made painstaking efforts to explore the effectiveness of public debt management policies, but the conclusions reached are not completely consistent. Scott (1965) studied the liquidity of financial assets and concluded that changes in the average maturity of public debt can explain the fluctuation of long- and short-term interest rates in financial markets to a certain extent. However, after conducting an empirical analysis based on their life-cycle hypothesis, F. Modigliani and H. Sutch (1967) found that the effect of the adjustment of public debt maturity on the interest rate structure of the financial market in the United States Very limited.

Friedman (1978) based on the research of Tobin et al. Established a mfffolio balance model that analyzes the effects of public debt, and demonstrated that if the replacement of public debt and real capital is worse than before the exchange, Then such a public debt management operation can promote the increase in physical capital demand, leading to a "crowd-ing-in effect". In essence, his research is to further empiricalize and model Tobin's theory, and the conclusion coincides with the latter.

Rory (1979) established a research model of public debt management policy from another perspective. He applied Markowitz's idea of utility maximization in asset portfolio and the method of multiple securities equilibrium determination in Sharp's capital asset pricing model to the portfolio management model of public debt management, and derived using Lagrange's equation: public debt management The effect on physical capital demand depends on the variance of capital and the covariance of various public debts and capital. The larger the variance and covariance in the portfolio, the greater the risk of investment. At this time, the investor will reduce the demand for capital in order to reduce the risk. The decline in capital demand directly reduces the Tobin's q value, which has a contraction effect on the economy. . The government can determine different public debt structure adjustment programs by calculating the variance of capital and the covariance of various public debts and capital under specific economic conditions, and choose expansionary debt management policies, tightening debt management policies and neutral debts as needed. Management policy.

After the 1990s, economists added more and more complex statistical methods when studying public debt management policies to accurately calculate the impact of public debt management on financial variables (such as interest rates) and real economic variables (such as economic growth). . Agell and Persson (1992) established a conditional variance-covariance model of asset portfolios and used several methods for estimation. Because the interval between portfolio adjustments depends on the investor's perspective on time, they first calculated based on quarterly and monthly data for the entire review period. Secondly, the basis for portfolio adjustment at a certain point in practice is not the return of assets during the entire examination period, but the historical data before that. Therefore, Agell and Persson adopted a moving sample historical data measurement algorithm. Historical data is not the only basis for investors to combine. According to efficient market theory, the market price of future assets reflects all the information available to investors now. "Investors' information sets include not only the government's monetary policy, tax policy, "Reasonable information" such as major adjustments in economic policies such as public debt management policies, and "noise" such as rumors that have nothing to do with the underlying market value. " To get closer to reality, they used option quotes in the Wall Street market as a true reflection of investors' market expectations. After calculation, the two found that the economic effects of the adjustment of the public debt maturity structure in the United States from the early 1960s to the early 1980s were not only small but also unstable. This conclusion is especially true as the calculation methods gradually become more realistic and complicated. Wallace and Warner (1996) also reached similar conclusions in subsequent research.

Almost at the same time, Friedman (1992) critically criticized the views of Agell et al. He believes that even in full accordance with the conclusion of Agell et al.increasing the long-term bond by 1% and increasing the market interest rate by 0.0476%, "Taking into account the adjustment of the existing US public debt balance, the effect of the term structure of the public debt on interest rates is not negligible . "Then, Friedman combined Roley's (1982) theory with the MPS econometric model in the United States, and concluded that the United States debt management policy affects both the short and long-term interest rates of financial markets and the physical economy such as output and capital formation. The factors have had a significant impact.

Almost at the same time as the development of the asset portfolio approach to public debt management policy, economists led by Lucas introduced rational expectations and time consistency issues to public debt management, opening up new methods for public debt management policy. According to Lucas and Stokey (1983), under the condition that the government's behavior is consistent with time inconsistency, if the government does not make any commitments in advance, then the adjustment of the public debt maturity structure within a certain period will likely achieve Optimal policy. However, if the government has made a public commitment in advance or the policy itself is an exogenous variable, that is, the market is perfect (market information can be fully shared), then the result of policy effectiveness is not valid. Calvo and Guidott (1990) confirmed this conclusion through empirical analysis. Thereafter, Persson et al. (1987) and Bohn (1988) applied rational expectations and time consistency theory to the analysis of nominal bonds and indexed bonds; Bohn (1990) used the problem of time consistency to analyze the currency structure of public bonds; Broeck (1997) applied this theory to the analysis of the ownership structure of public debt. They all reached similar conclusions as Lucas et al., That the government will encounter the problem of time consistency when managing public debt, that is, in the absence of sufficient commitments, the above-mentioned public debt structural adjustment policies will tend to invalid.