A Note on Long-Maturity Floating-Rate Debt in the Fiscal Theory of the Price Level

Autores

Palavras-chave:

floating-rate debt, Fiscal Theory of the Price Level, government debt, monetary policy, debt maturity

Resumo

This note formalizes long-maturity floating-rate government debt in the government budget constraint of a sequential New Keynesian model under the Fiscal Theory of the Price Level. Under perfect resetting and standard assumptions, the fundamental ex-coupon price remains at par, so contractual maturity drops out of the fiscal constraint. Consequently, the valuation channel underlying the stepping-on-a-rake response disappears.

Biografia do Autor

Eudes Augusto Barros Torres, Array

Eudes Augusto Barros Torres is a PhD student in Economics at FGV EPGE Brazilian School of Economics and Finance. He holds a Bachelor's degree in Economics from the Federal University of Rio de Janeiro (UFRJ). His research interests focus on macroeconomics, especially monetary-fiscal interactions, public debt, and applied macroeconomics. His current research investigates the role of public debt composition and maturity in the transmission of monetary and fiscal policies, as well as empirical issues related to sovereign debt and asset pricing.

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Publicado

2026-10-23

Edição

v. 80 n. 3 (2026): JUL-SET

Seção

Artigos

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