As this interrelationship is crucial to the transmission of monetary impulses, the following questions are worth answering. Will the importance of bank deposits shrink, and what would be the implications? To what extent will bank and bond market financing be substitutes? And how readily will banks be able to adapt to their ever-changing environment? I hope that these issues might capture researchers’ curiosity.
This implies that public borrowing needs to be carefully managed to ensure that future resource revenues are not committed in advance to debt repayment. A focus on long-run infrastructure development by the public finance authorities could help to ensure that additional borrowing pays back the debt without reducing the benefit of future resource revenues for future generations.