TY  - JOUR
AU  - Alesina,Alberto
AU  - Prati,Alessandro
AU  - Tabellini,Guido
TI  - Public Confidence and Debt Management:  A Model and A Case Study of Italy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3135
PY  - 1989
Y2  - October 1989
UR  - http://www.nber.org/papers/w3135
L1  - http://www.nber.org/papers/w3135.pdf
N1  - Author contact info:
Alberto F. Alesina
Department of Economics
Harvard University
Littauer Center 210
Cambridge, MA 02138
Tel: 617/495-8388
Fax: 617/495-7730
E-Mail: aalesina@harvard.edu

Guido Tabellini
IGIER Universita' Bocconi
Via Roentgen 1
20136 Milano
Italy
Tel: 39 2 583 6 3305; fax 3302
E-Mail: guido.tabellini@unibocconi.it
AB  - High debt countries may face the risk of self-fulfilling debt crises. If the public expects that in the future the government will be unable to roll over the maturing debt, they may refuse to buy debt today and choose to hold foreign assets. This lack of confidence may then be self-fulfilling. This paper argues that under certain conditions, the occurrence of a confidence crisis is more likely if the average maturity of the debt is short.  In the contrary, a long and evenly distributed maturity structure may reduce such a risk. We consider the recent Italian experience from this perspective. In particular we ask whether recent developments in the market for government debt showy signs of unstable public confidence, and of a risk premium.
ER  -