Template-Type: ReDIF-Paper 1.0
Author-Name: Eduardo Amaral
Author-X-Name-First: Eduardo
Author-X-Name-Last: Amaral
Author-Name: Rafael Guerra
Author-X-Name-First: Rafael
Author-X-Name-Last: Guerra
Author-Name: Alejandrina Salcedo
Author-X-Name-First: Alejandrina
Author-X-Name-Last: Salcedo
Author-Name: Pablo Tomasini
Author-X-Name-First: Pablo
Author-X-Name-Last: Tomasini
Author-Name: Christian Upper
Author-X-Name-First: Christian
Author-X-Name-Last: Upper
Title: High public debt in the Americas: non-linear implications for risk premia and inflation expectations
Abstract: Public debt has reached multi-decade highs in the Americas. Additionally, public interest costs have generally increased over the past decade. High public debt and interest costs increase the sensitivity of risk premia to fiscal deficits – regardless of the exchange rate regime – and amplify the sensitivity of short-term inflation expectations to fluctuations in risk premia.Our analysis underscores the relevance of disciplined fiscal policies, which assume heightened significance in the context of current debt dynamics. On the monetary side, safeguarding central bank independence is crucial for ensuring macroeconomic stability.
Length: 8 pages
Creation-Date: 2026-08-19
File-URL: https://www.bis.org/publ/bisbull133.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/bisbull133.htm
File-Format: text/html
Number: 133
Handle: RePEc:bis:bisblt:133