01987cas a2200253 a 4500 AALejournalIMF011251 230101c9999 xx r poo 0 0eng d 5.00 USD 9781463902148 1018-5941 BD-DhAAL BD-DhAAL Guerson, Alejandro. Public Debt Targeting An Application to the Caribbean / Alejandro Guerson, Giovanni Melina. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (38 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 proposes a fiscal policy framework we call Public Debt Targeting. The framework seeks to smooth primary spending over the business cycle while remaining consistent with public debt sustainability. Under the proposed framework, a government announces a commitment to a public debt band trajectory over the medium term, while sequentially announcing primary expenditures for the next budget cycle, which are determined recursively based on the history of shocks. Public debt targeting differs from a structural balance rule in that it internalizes the effect of the deterioration in creditworthiness from fiscal deficits and public debt accumulation, which tend to affect sovereign spreads, interest rates, exchange rates, and economic activity. The proposed framework is applied to Caribbean economies, which in general show high levels of public debt and procyclical primary expenditure. Mode of access: Internet Melina, Giovanni. IMF Working Papers; Working Paper ; No. 2011/203 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/203/001.2011.issue-203-en.xml IMF e-Library