*** Apologize for cross-posting ***

On *July 14 at 17:00, Matteo Brachetta* (Department of Mathematics, Politecnico di Milano https://scholar.google.com/citations?view_op=view_org&hl=it&org=3907090038794971103) will give a virtual seminar “in Insubria & Bicocca”, to which you are all invited. You can find the title and abstract below.

Title: *Optimal Public Debt Management*

Abstract: Public debt management is one of the most relevant topics in Economics, especially after economic crises due to wars, pandemics or economic recession. We discuss a class of debt management problems in a stochastic environment model. We propose a model for the Debt-to-GDP ratio where the government interventions (via fiscal policies) affect the public debt and the GDP growth rate at the same time. We allow for a stochastic interest rate on debt and possible correlation with the GDP growth rate. Indeed, both the interest rate and the GDP growth depend on a stochastic factor, which may represent any relevant macroeconomic variable, such as economic conditions. Moreover, shocks on debt and GDP can be correlated. We tackle the problem of a government whose goal is to determine the fiscal policy (quantity of surplus or deficit) in order to minimize a general functional cost. We prove that the value function is a viscosity solution to the Hamilton-Jacobi-Bellman equation and provide a Verification Theorem based on classical solutions. Then we discuss two applications, namely debt reduction and debt smoothing, providing explicit results.

The seminar will be on *Zoom*. You can find the information to join below.

Speaker: Matteo Brachetta

Topic: Optimal Public Debt Management

Time: July 14, 2021, 17:00 Rome

Where: Zoom

Link: https://us02web.zoom.us/j/84293514055?pwd=eFJSQitDTzZ0QUtsMUUzSlh0ZW43Zz09

ID riunione: 842 9351 4055 Passcode: jB3XTr

After the talk, you are all invited to remain in the meeting for an informal aperitif and chat.

Please forward to anyone interested.

Kind regards,

Emanuela Rosazza Gianin and Elisa Mastrogiacomo