Politique monétaire, politique fiscale et dette publique dans un monde post COVID

Fiscal policy has responded to the economic disruptions caused by the global COVID-19 pandemic with stimulus and income-support packages of unprecedented scale, while monetary policy has further enlarged the set of instruments it uses to respond to large shocks in a low r-star environment.  In parallel, the resulting increase in public debt has rekindled debates on the possible constraints put by high levels of public debt on the ability of monetary policy to control inflation, and the impact of inflation on public debt.

This new environment opens numerous questions on how to design monetary and fiscal policies going forward and how they interact in an environment of high public debt, in particular in a monetary union. Will the post-pandemic economy require a different policy mix, and/or a different form of coordination between fiscal and monetary authorities? Do high levels of public debt pose a threat to the central bank’s ability to deliver price stability? Is inflation a feasible and/or desirable solution to high levels of public debt?

This conference aims at bringing together researchers from academia, central banks and other policy institutions to present empirical and theoretical work on monetary policy, fiscal policy, and public debt, with a particular interest in works that speak of their interactions.

Thursday, 18 November

12:30 – 13:00 Registration

13:00 – 13:15 Welcome speech by Olivier Garnier (BdF)

13:15 – 14:45 Session 1 “Fiscal dominance: practice and theory”

• “Coordinating Monetary and Fiscal Policies in Times of High Public Debt: How Fiscal Dominance led to Inflation during the French Wars (1793-1821)” by Pamfili Antipa (BdF, with Christophe Chamley).
  Discussant: Rui Esteves (The Graduate Institute Geneva and CEPR)
• “The Economics of Helicopter Money” by Pierpaolo Benigno (University of Bern, EIEF and CEPR, with Salvatore Nistico).
  Discussant: Jean Barthelemy (BdF)

14:45 – 15:00 Coffee break

15:00 – 16:00 Invited speaker Ricardo Reis (LSE and CEPR)

16:00 – 17:30 Session 2 “The optimal level of public debt”

• “The Liquidity Channel of Fiscal Policy” by Benjamin Born (Frankfurt School of Finance & Management and CEPR, with Christian Bayer & Ralph Luetticke).
  Discussant: Kurt Mitman (Institute for International Economic Studies and CEPR)
• “The Risks of Safe Assets” by Lukas Schmid (Marshall School of Business/USC and CEPR, with Yang Liu & Amir Yaron).
  Discussant: Benoit Mojon (BIS)

17:30 – 17:45 Coffee break

17:45 – 19:15 Session 3 “Pricing government debt in the Euro area”

• “Bond Convenience Yields in the Eurozone Currency Union” by Hanno Lustig (Stanford GSB, NBER and CEPR, with Zhengyang Jiang, Stijn van Nieuwburgh & Mindy Z. Xiaolan).
  Discussant: Dmitriy Sergeyev (Bocconi University and CEPR)
• “Fiscal Limits and the Price of Eurobonds” by Jean-Paul Renne (University of Lausanne, with Kevin Pallara).
  Discussant: Irina Zviadadze (HEC Paris and CEPR)

Friday, 19 November

11:30 – 13:00 Session 4 “Sovereign default risk and central bank asset purchases”

• “Asset Purchases and Heterogeneous Beliefs on Default Risk” by Carlo Galli (Universidad Carlos III de Madrid, with Gaetano Gaballo).
  Discussant: Christian Hellwig (TSE and CEPR)
• “The Term Structure of Interest Rates in a Heterogeneous Monetary Union” by James Costain (Banco de España, with Galo Nuno & Carlos Thomas).
  Discussant: Wolfgang Lemke (ECB)

13:00 – 14:00 Lunch break

14:00 – 15:00 Invited speaker: Federica Romei (University of Oxford and CEPR) “Sovereign Default in a Monetary Union” (with Sergio de Ferra)

15:00 – 16:30 Session 5 “Risk sharing in a currency union”

• “Monetary/Fiscal Interactions with Forty Budget Constraints” by Marco Bassetto (Federal Reserve Bank of Minneapolis, NBER, with Gherardo Caracciolo)
  Discussant: Francesco Bianchi (Duke University, NBER and CEPR)
• “Who is Afraid of Eurobonds?” by Anna Rogantini Picco (Sveriges Riksbank, with Francesco Bianchi & Leonardo Melosi)
  Discussant: Bartosz Maćkowiak (ECB and CEPR)

16:30 – 17:00 Coffee break

17:00 – 18:00 Invited speaker: John H. Cochrane (Hoover Institute and NBER) “Monetary and Fiscal Policy, Entwined in the Shadow of Debt”

Presentations are divided into 30 minutes for presenters, 10 minutes for discussants and 5 minutes for Q&A. 
Presentations of invited speakers are divided into 45 minutes for presenter and 15 minutes for general discussion. 

Organising committee: Vincent Bignon (BdF and CEPR) ; Stéphane Dupraz (BdF) & Christoph Grosse-Steffen (BdF)