01627cas a2200253 a 4500 AALejournalIMF002709 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451875379 1018-5941 BD-DhAAL BD-DhAAL Cosimano, Thomas. Optimal Fiscal and Monetary Policy with Nominal and Indexed Debt / Thomas Cosimano, Michael Gapen. Washington, D.C. : International Monetary Fund, 2003. 1 online resource (39 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper highlights the importance of debt composition in setting optimal fiscal and monetary policy over short-run business cycles and in the long run. Nominal debt as state-contingent debt can be a significant policy tool to reduce the volatility of distortionary government policy, thereby reducing macroeconomic volatility while increasing equilibrium output and consumption. The welfare gain from using nominal debt to hedge against shocks to the government budget is as large as the welfare gain from the ability to issue debt. Mode of access: Internet Gapen, Michael. IMF Working Papers; Working Paper ; No. 2003/225 Full text available on IMF http://elibrary.imf.org/view/journals/001/2003/225/001.2003.issue-225-en.xml IMF e-Library