Debt Replacement,Systemic Financial Risk and Macro Policy Coordination
The debt replacement policy launched in China aims to resolve the issue of local government debt risk.However,there is still no consensus on whether this policy can effec-tively mitigate risk and how it works.This paper constructs a dynamic stochastic general equilibrium(DSGE)to investigate how to prevent and mitigate the side effects of debt re-placement policy on systemic financial risks.Theoretical analysis reveals that while debt replacement policy can alleviate the short-term default risk of the local government,it can also bring about the side effect of increasing systemic financial risk.The side effect comes from two channels:liquidity channel and default transfer channel,so the design of debt replacement should fully consider the side effects of these two channels.This study reveals that combining monetary policy or macroprudential policy can alleviate the side effects of debt replacement,with the latter being more effective.Therefore,to better ensure the suc-cess of debt replacement policy,this paper suggests implementing a policy combination of"debt replacement+macroprudential measures".
万方数据
维普
