Term structure of public debt
and the economic safety of currency
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Zakład Ekonomii
Wydział Administracji i Nauk Społecznych
Politechnika Warszawska
Publication date: 2015-03-31
JoMS 2015;24(1):249-268
KEYWORDS
ABSTRACT
One of the most important factor in current economy is stability of
money. People want stabile rate of exchange, stabile purchasing power and
possibility to gather wealth in time by saving the currency. Today no currency
is associated with gold, monetary stability is mainly due to two factors:
confi dence to an independent Central Bank and public debt policy.
First factor is regulated by law guarantying independence of Central Bank
and by the goal of the Central Bank. The second factor in current world
depends on current needs of economy. As far as in diff erent countries may
be law acts to protect against excessive defi cit, then there are no solutions
on the time structure of debt. Therefore, this article is an attempt to draw
attention to the threat to the safety of the currency, whose cause is too
short the average tenor of the debt, but above all, the wrong distribution
time structure of the debt, especially debt owed abroad. This study aims at
showing how in a real world of debt looks like the safety of the currency.
Working hypothesis says that not the scale of debt but the time structure
of debt is the main important factor for possible risk for the state currency.
But this security cost money and the decision belongs to politicians.