TY - BOOK ID - 84541533 TI - Optimal Fiscal and Monetary Policy with Nominal and Indexed Debt AU - Cosimano, Thomas. AU - Gapen, Michael. PY - 2003 SN - 1462398081 1452738939 1283513048 9786613825490 1451919972 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Debts, Public. KW - Monetary policy. KW - Fiscal policy. KW - Tax policy KW - Taxation KW - Economic policy KW - Finance, Public KW - Monetary management KW - Currency boards KW - Money supply KW - Debts, Government KW - Government debts KW - National debts KW - Public debt KW - Public debts KW - Sovereign debt KW - Debt KW - Bonds KW - Deficit financing KW - Government policy KW - Macroeconomics KW - Money and Monetary Policy KW - Public Finance KW - Labor KW - Financial Markets and the Macroeconomy KW - Comparative or Joint Analysis of Fiscal and Monetary Policy KW - Stabilization KW - Treasury Policy KW - Debt Management KW - Sovereign Debt KW - National Government Expenditures and Related Policies: General KW - Macroeconomics: Consumption KW - Saving KW - Wealth KW - Labor Economics: General KW - Monetary Systems KW - Standards KW - Regimes KW - Government and the Monetary System KW - Payment Systems KW - Personal Income and Other Nonbusiness Taxes and Subsidies KW - Demand and Supply of Labor: General KW - Public finance & taxation KW - Labour KW - income economics KW - Monetary economics KW - Welfare & benefit systems KW - Expenditure KW - Consumption KW - Currencies KW - Labor taxes KW - National accounts KW - Taxes KW - Labor supply KW - Expenditures, Public KW - Economics KW - Labor economics KW - Money KW - Income tax KW - Labor market KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:84541533 AB - This paper highlights the importance of debt composition in setting optimal fiscal and monetary policy over short-run business cycles and in the long run. Nominal debt as state-contingent debt can be a significant policy tool to reduce the volatility of distortionary government policy, thereby reducing macroeconomic volatility while increasing equilibrium output and consumption. The welfare gain from using nominal debt to hedge against shocks to the government budget is as large as the welfare gain from the ability to issue debt. ER -