Public Debt as Private Liquidity: Optimal Policy
研究了在低利率环境下，公共债务作为抵押品或缓冲库存时，最优债务发行量如何权衡福利提升与利率上升，并解释了短期偏离税收平滑及金融危机期间扩大赤字的合理性。
We study optimal policy in an economy where interest rates are low because public debt serves as collateral or buffer stock. Issuing more public debt raises welfare by easing the underlying friction but also reduces the private valuation of this service, raising interest rates. This trade-off shapes the optimal quantity of public debt in the long run, justifies a departure from tax smoothing in the short run, and calls for larger deficits during financial crises. Our analysis illustrates the possible robustness of these insights to different microfoundations and helps clarify when exactly low interest rates represent an opportunity for cheap government borrowing.