This volume from the Centre for Economic Policy Research brings together research on the management of public debt and its implications for financial stability.As Europe proceeds towards economic and monetary union, fiscal convergence and the prospect of a common money are at the centre of discussion. This volume from the Centre for Economic Policy Research brings together theoretical, applied and historical research on the management of public debt and its implications for financial stability.As Europe proceeds towards economic and monetary union, fiscal convergence and the prospect of a common money are at the centre of discussion. This volume from the Centre for Economic Policy Research brings together theoretical, applied and historical research on the management of public debt and its implications for financial stability.This book from the Centre for Economic Policy Research collects theoretical, applied and historical research on the welfare economics of public debt; how inappropriate debt management can lead to funding crises; capital levies; debt consolidation; U.S. public debt history; political influences on debt accumulation; trade-offs between indexation and maturity; and confidence effects in a stochastic rational expectations framework.List of figures; List of tables; Preface; List of conference participants; 1. Introduction Rudiger Dornbusch and Mario Draghi; 2. The efficient design of public debt Douglas Gale; Discussion Olivier Jean Blanchard; 3. Indexation and maturity of government bonds: an exploratory model Guillermo A. Calvo and Pablo E. Guidotti; Discussion William H. Branson and Allen Drazen; 4. Public confidence and debt management: a model and a case study of Italy Alberto Alesina, Alessandro Pratti and Guido Tabellini; Discussion Mario Draghi and Lars E. O. Svensson; 5. Confidence crises and public debt management Francesco Giavazzi and Marco Pagano; Discussion Enrica Detragiache and Maurice Obstfeld; 6. Funding crises in the aftermath of ló<