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Confidence Crises and Public Debt Management

Giavazzi, Francesco; Pagano, Marco - C.E.P.R. Discussion Papers - 1989

Under free capital mobility, confidence crises can lead to devaluations even when fixed exchange rates are viable, if fiscal authorities can obtain temporary money financing of deficits. During a crisis domestic interest rates increase, reflecting the expected devaluation. Rather than selling...

Persistent link: https://www.econbiz.de/10005791449

Public Confidence and Debt Management: A Model and a Case Study of Italy

Alesina, Alberto F; Prati, Alessandro; Tabellini, Guido - C.E.P.R. Discussion Papers - 1989

High-debt countries may face the risk of self-fulfilling debt crises. If the public expects that in the future the government will be unable to roll over the maturing debt, they may refuse to buy debt today and choose to hold foreign assets. This lack of confidence may then be self-fulfilling....

Persistent link: https://www.econbiz.de/10005497997

Endogenous Market Thinness and Stock Price Volatility

Pagano, Marco - C.E.P.R. Discussion Papers - 1986

resulting volatility can induce risk-averse transactors who face transaction costs to desert these markets altogether. Thus … thinness and the consequent price volatility may become joint self-perpetuating features of an equity market, whatever the … volatility of asset fundamentals. If, however, appropriate incentive schemes are adopted to encourage entry of additional …

Persistent link: https://www.econbiz.de/10005662005

Leverage as a Predictor for Real Activity and Volatility

Kollmann, Robert; Zeugner, Stefan - C.E.P.R. Discussion Papers - 2011

positively linked to the conditional volatility of future real activity and of equity returns. The joint information in sectoral …

Persistent link: https://www.econbiz.de/10008915810

A Brazilian Debt-Crisis Model

Razin, Assaf; Sadka, Efraim - C.E.P.R. Discussion Papers - 2002

We develop a stylised model of multiple equilibria, with country risk spreads at the focus of the analysis. Fears that the country default on its debt triggers a reversal in the direction of inflows of international financial capital raise interest-rate spreads and thus the cost of servicing the...

Persistent link: https://www.econbiz.de/10005666609

Settling Defaults in the Era of Bond Finance

Eichengreen, Barry; Portes, Richard - C.E.P.R. Discussion Papers - 1988

We scrutinize two strands of received wisdom about debt crises: that which draws a strong contrast between the 1930s and 1980s in extent of default and ease of settlement, and that which attributes the difference to greater government involvement today. Rather than a sharp, dichotomous variable,...

Persistent link: https://www.econbiz.de/10005666671

A Cultural Clash View of the EU Crisis

Guiso, Luigi; Herrera, Helios; Morelli, Massimo - C.E.P.R. Discussion Papers - 2013

If voters of different countries adhere to different and deeply rooted cultural norms, when these countries interact their leaders may find it impossible to agree on effcient policies especially in hard times. Political leaders’actions are bound by a “conformity constraint”that requires...

Persistent link: https://www.econbiz.de/10011083748

Three Sisters: The Interlinkage between Sovereign Debt, Currency and Banking Crises

Eijffinger, Sylvester C W; Karatas, Bilge - C.E.P.R. Discussion Papers - 2013

The sovereign debt default and the linkages from banking and currency crisis have been rarely explored in the crisis literature. This study attempts to dive into this unexplored area by applying panel data binary choice model on a sample with 20 emerging countries having monthly observations for...

Persistent link: https://www.econbiz.de/10011084100

The European Bond Markets Under EMU

Pagano, Marco; von Thadden, Ernst-Ludwig - C.E.P.R. Discussion Papers - 2004

In this Paper, we document how in the wake of monetary unification the markets for euro area sovereign and private-sector bonds have become increasingly integrated. Issuers and investors alike have come to regard the euro area bond market as a single one. Primary and secondary bond markets have...

Persistent link: https://www.econbiz.de/10005791915

How Large Are the Effects of Tax Changes?

Favero, Carlo A.; Giavazzi, Francesco - C.E.P.R. Discussion Papers - 2009

We use the time series of shifts in U.S. Federal tax liabilities constructed by Romer and Romer to estimate tax multipliers. Differently from the single-equation approach adopted by Romer and Romer, our estimation strategy (a Var that includes output, government spending and revenues, inflation...

Persistent link: https://www.econbiz.de/10005082536

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