NY Fed paper highlights risky debt management strategies

Higher than average levels and maturities of debt can induce macroeconomic instability if an active fiscal policy strategy is not adopted, according to a New York Federal Reserve paper, published on Wednesday.

Stefano Eusepi and Bruce Preston, the paper's authors, examine how the scale and composition of public debt can affect economies that implement a combination of passive monetary policy and active fiscal policy. They say that this policy configuration is considered to be of both historical