Add to ORKG120 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 2006.The third chapter analyzes issues about public debt maturity in a general equilibrium model of a small open economy under inflation target. Following a risk premium shock, the households of this economy suffer higher wealth losses if they finance the government with longer maturity nominal bond. This happens due to surprise inflation and because of the foregone returns not earned in a longer position. This result may explain the difficulty faced by several Treasuries of emerging economies to extend the debt maturity in moments of confidence crisis. Our simulations also indicate that stronger commitment to stable inflation helps a Treasury willing to extend debt maturity ...