Abstract
IN A RECENT EDITION OF THIS Journal, Henry Goldstein critically analyzed the arguments presented by the U.S. Treasury against selling longterm securities by the auction method, and suggested that auctioning bonds might be a useful method of reducing interest costs in a market of rising bond prices.1 Since the publication of Goldstein's paper, the Treasury has partially revised its position by twice auctioning bonds with maturities of thirty years. This paper analyzes both this recent experience and recent Canadian experience in auctioning bonds and, in the light of these results, reviews the arguments for and against the use of the auction technique.
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