Ghosh, Atish R.; Ostry, Jonathan D.; Qureshi, Mahvash S. - In: Journal of International Money and Finance 34 (2013) C, pp. 131-163
We examine how membership in a currency union affects public debt sustainability and market assessments of default risk in eurozone countries. We argue that there exist offsetting effects: expectations of bailouts tend to make a given level of debt more sustainable, lowering bond yields and CDS...