Summary
This paper studies financing strategies which underlie the maturity structure of the public debt. Three important objectives for domestic public debt management are distinguished: interest cost reduction, economic stabilization and economic neutrality. The strategies which can be associated with these objectives are incorporated in a simple debt management model, which has been tested empirically for the case of The Netherlands. Variations in debt maturities between 1960 and 1985 appear to be related to changes in capital market conditions, investment preferences and expected real interest rates.
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I would like to thank Jakob de Haan, Victor Halberstadt, Robert Haveman, Jeroen Kremers, Gusta Renes, Ben van Velthoven and two referees for valuable comments. Research assistance by Marlies Pel is gratefully acknowledged.
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Goudswaard, K.P. Determinants of public debt maturities. De Economist 138, 33–46 (1990). https://doi.org/10.1007/BF01718388
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DOI: https://doi.org/10.1007/BF01718388