“Whatever It Takes” Is All You Need: Monetary Policy and Debt Fragility
研究了政府债务估值中的战略不确定性如何导致债务脆弱性，并分析了货币政策能否通过承诺或声誉机制缓解这一问题，对理解央行干预效果有参考价值。
The valuation of government debt is subject to strategic uncertainty. Pessimistic lenders, fearing default, bid down the price of debt, leaving a government with a higher debt burden. This increases the likelihood of default, thus confirming the pessimism of lenders. Can monetary interventions mitigate debt fragility? With one-period commitment to a state-contingent policy, the monetary authority can indeed overcome strategic uncertainty. Under discretion, debt fragility remains unless reputation effects are sufficiently strong. Simpler forms of interventions, such as an inflation target, cannot eliminate debt fragility.