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Moving Back Towards Market-Based Government Finance

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  • William Allen

Abstract

The Federal Reserve and the Bank of England have been pursuing yield curve control in their respective government securities markets since market liquidity collapsed in the middle of March. The paper discusses the issues that arose during and after previous episodes of yield curve control, particularly after World War II, and proposes changes in procedures, such as state underwriting of new issue auctions and a safety net for market markers, that would help the authorities escape from the rigidity of present policies.

Suggested Citation

  • William Allen, 2020. "Moving Back Towards Market-Based Government Finance," National Institute of Economic and Social Research (NIESR) Policy Papers 18, National Institute of Economic and Social Research.
    • Handle: RePEc:nsr:niesrp:18
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    File URL: https://www.niesr.ac.uk/wp-content/uploads/2021/10/William-Allen-NIESR-Policy-Paper-18-Moving-Back-Towards-Market-Based-Government-Finance-4.pdf?ver=2vixaCR4SJUjfDygiQOx
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    References listed on IDEAS

    as
    1. William Allen, 2020. "Central Bank Operations in Government Securities During the Pandemic," National Institute of Economic and Social Research (NIESR) Policy Papers 14, National Institute of Economic and Social Research.
    2. Richhild Moessner & David-Jan Jansen & Jakob de Haan, 2017. "Communication About Future Policy Rates In Theory And Practice: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(3), pages 678-711, July.
    3. Richhild Moessner & William Anthony Allen, 2020. "The Fed's enhanced swap lines and new interventions in the Treasury market," National Institute of Economic and Social Research (NIESR) Discussion Papers 513, National Institute of Economic and Social Research.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Central bank operations; government bonds;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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