Pandemic-Era Federal Debt Normalization: A Constitutional Framework for the Fiscal Treatment of Federal Reserve Held Treasury Securities

Venslauskas, Kazimieras (2026): Pandemic-Era Federal Debt Normalization: A Constitutional Framework for the Fiscal Treatment of Federal Reserve Held Treasury Securities.

Abstract

This paper examines the fiscal and institutional implications of post-pandemic public debt dynamics, with particular focus on the treatment of sovereign debt instruments held by central banks. It develops a normative framework for assessing the macroeconomic and institutional dimensions of pandemic-era debt expansion and subsequent normalization strategies. The analysis is intended to inform ongoing debates in fiscal and monetary policy coordination, debt sustainability, and institutional design in advanced economies.

• Item Type: MPRA Paper
• Language: English
• Keywords: fiscal policy, monetary policy, public debt, sovereign debt, central bank balance sheet, macroeconomic policy, post pandemic economy
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy

References

U.S. Constitution, Article I, Section 8. Federal Reserve Act, 12 U.S.C. § 221. Venslauskas, K. (2026). Pandemic-Era Federal Debt Normalization. SSRN Working Paper.