Government Debt Management at the Zero Lower Bound

Government Debt Management at the Zero Lower Bound, Objectives and Tradeoffs: you cannot have it both ways, describes the tradeoff between monetary and fiscal, objectives during the financial crisis. With monetary policy at the zero lower bound, the Federal Reserve purchased long term Treasuries in order to reduce the outstanding quantity of long term safe assets. At the same time, the Treasury lengthened the maturity structure of debt, as it typically does during a cyclical upturn in the debt to GDP ratio. This paper discusses the pros and cons of this combination of policies.