By shining a light on the problem and the range of feasible solutions, transparent policy rules clarify the budget choices that must be made, help the public understand those choices, and encourage policymakers to recognize the broader fiscal consequences of their decisions on individual programs. In particular, transparent fiscal rules may help solve what economists refer to as a collective action problem.
It is therefore not surprising that the average debt maturity of large nonfinancial firms has increased notably over the past few years. Moreover, the same pattern shows up among large financial firms – they too have been significantly lengthening their average debt maturity.