Survey_Breuer_1999

Abstract

"We consider a public debt manager representing a government which wants to raise money by issuing some prespecified number B of bonds at time 0. Any of these bonds will lead to payments amounting to unity at time 1. The government´s general objective is to maximize revenues from the sale of these bonds at time 0. Certainly, in reality public debt managers are concerned of more than just only one objective.13 But on the one hand the coverage of the government´s borrowing needs at minimum costs (which in general means to maximize sales revenues) seems to be the most important goal for public debt managers. In particular, in Germany such an objective can be derived from section 7 of the German federal budget rules (""Bundeshaushaltsordnung""). On the other hand, in many cases other objectives can be viewed as means to assure the realization of maximum revenues from issuing a given number of bonds. For example, enhancing secondary market liquidity can in general be thought of as a means to improve upon the issuance conditions for public debt."