---
res:
bibo_abstract:
- "Consider the problem of a government that wants to control its debt-to-GDP\r\n(gross
domestic product) ratio, while taking into consideration the evolution of the
inflation\r\nrate of the country. The uncontrolled inflation rate follows an Ornstein-Uhlenbeck
dynamics\r\nand affects the growth rate of the debt ratio. The level of the latter
can be reduced by the\r\ngovernment through fiscal interventions. The government
aims at choosing a debt reduction\r\npolicy which minimises the total expected
cost of having debt, plus the total expected cost of\r\ninterventions on debt
ratio. We model such problem as a two-dimensional singular stochastic\r\ncontrol
problem over an infinite time-horizon. We show that it is optimal for the government\r\nto
adopt a policy that keeps the debt-to-GDP ratio under an inflation-dependent ceiling.
This\r\ncurve is the free-boundary of an associated fully two-dimensional optimal
stopping problem, and\r\nit is shown to be the unique solution of a nonlinear
integral equation.@eng"
bibo_authorlist:
- foaf_Person:
foaf_givenName: Giorgio
foaf_name: Ferrari, Giorgio
foaf_surname: Ferrari
foaf_workInfoHomepage: http://www.librecat.org/personId=32701753
bibo_volume: 564
dct_date: 2016^xs_gYear
dct_isPartOf:
- http://id.crossref.org/issn/0931-6558
dct_language: eng
dct_publisher: Center for Mathematical Economics@
dct_subject:
- debt-to-GDP ratio
- inflation rate
- debt ceiling
- singular stochastic control
- optimal stopping
- free-boundary
- nonlinear integral equation
dct_title: Controlling public debt without forgetting Inflation@
...