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Correia, Isabel; De Fiore, Fiorella; Teles, Pedro; … - C.E.P.R. Discussion Papers - 2014

How should monetary and fiscal policy react to adverse financial shocks? If monetary policy is constrained by the zero lower bound on the nominal interest rate, subsidising the interest rate on loans is the optimal policy. The subsidies can mimic movements in the interest rate and can therefore...

Persistent link: https://www.econbiz.de/10011083684

Bank and Sovereign Risk Interdependence in the Euro Area

Kollintzas, Tryphon; Tsoukalas, Konstantinos - C.E.P.R. Discussion Papers - 2015

We develop a dynamic stochastic general equilibrium model to study bank risk and sovereign risk interdependence in the Euro Area. We find that an increase in capital investment risk shock, results in a considerably deeper recession when sovereign risk is also present. This result has three...

Persistent link: https://www.econbiz.de/10011201352

Growth in a Time of Debt

Reinhart, Carmen M.; Rogoff, Kenneth - C.E.P.R. Discussion Papers - 2010

We study economic growth and inflation at different levels of government and external debt. Our analysis is based on new data on forty-four countries spanning about two hundred years. The dataset incorporates over 3,700 annual observations covering a wide range of political systems,...

Persistent link: https://www.econbiz.de/10008468655

Inflation Targeting and Debt: Lessons from Brazil

Favero, Carlo A.; Giavazzi, Francesco - C.E.P.R. Discussion Papers - 2004

A single variable describes, day-by-day, what investors think about the state of Brazil's economy: the Brazilian component of the Emerging Market Bond Index, the Embi spread. This spread is the difference between the yield on a dollar-denominated bond issued by the Brazilian government and a...

Persistent link: https://www.econbiz.de/10005123784

Fiscal Discipline and the Cost of Public Debt Service: Some Estimates for OECD Countries

Ardagna, Silvia; Caselli, Francesco; Lane, Timothy - C.E.P.R. Discussion Papers - 2004

We use a panel of 16 OECD countries over several decades to investigate the effects of government debts and deficits on long-term interest rates. In simple static specifications, a one-percentage-point increase in the primary deficit relative to GDP increases contemporaneous long-term interest...

Persistent link: https://www.econbiz.de/10005067414

Paved with Good Intentions: Global Financial Integration, the Eurozone, and the Imaginary Road to the Fabled Gold Standard

Underhill, Geoffrey R D - C.E.P.R. Discussion Papers - 2010

Regional systems of governance may resolve some of the dilemmas of global financial integration, and the eurozone is … deal with this eventuality. A third section examines the crisis in the Eurozone and the reaction to it in the light of this … successfully managed, with domestic political dynamics stimulating centrifugal tendencies among eurozone members claiming to be …

Persistent link: https://www.econbiz.de/10008784770

Inspecting the Mechanism: Leverage and the Great Recession in the Eurozone

Martin, Philippe; Philippon, Thomas - C.E.P.R. Discussion Papers - 2014

We provide a first comprehensive account of the dynamics of Eurozone countries from the creation of the Euro to the … exports of Eurozone countries between 2000 and 2012. We then ask how periphery countries would have fared with: (i) more …

Persistent link: https://www.econbiz.de/10011084051

Public Debt and Redistribution with Borrowing Constraints

Bilbiie, Florin Ovidiu; Monacelli, Tommaso; Perotti, Roberto - C.E.P.R. Discussion Papers - 2012

In an economy with financial imperfections, Ricardian equivalence holds when prices are flexible and the steady-state distribution of consumption is uniform, or labor is inelastic. With different steady-state consumption levels, Ricardian equivalence fails, but tax cuts, somewhat paradoxically,...

Persistent link: https://www.econbiz.de/10011084445

Distortionary fiscal policy and monetary policy goals

Adam, Klaus; Billi, Roberto M - C.E.P.R. Discussion Papers - 2010

We study interactions between monetary policy, which sets nominal interest rates, and fiscal policy, which levies distortionary income taxes to finance public goods, in a standard, sticky-price economy with monopolistic competition. Policymakers' inability to commit in advance to future policies...

Persistent link: https://www.econbiz.de/10008468585

Debt consolidation and fiscal stabilization of deep recessions

Corsetti, Giancarlo; Kuester, Keith; Meier, André; … - C.E.P.R. Discussion Papers - 2010

The global financial crisis of 2008-09 has sent public debt on sharply higher trajectories. With the economic recovery gradually taking hold, the focus is now shifting to fiscal "exit" strategies. Medium-term consolidation efforts are likely to include not only tax increases but also sizeable...

Persistent link: https://www.econbiz.de/10008468677

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