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Is it Too Late to Bail Out the Troubled Countries in the Eurozone?
Conesa, Juan Carlos - 2014
In January 1995, U.S. President Bill Clinton organized a bailout for Mexico that imposed penalty interest rates and … Central Bank, and International Monetary Fund) organize similar bailouts for the troubled countries in the Eurozone? Our … analysis suggests that debt levels are so high that bailouts with penalty interest rates could induce the Eurozone governments …
Persistent link: https://www.econbiz.de/10013058257
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Target Loans, Current Account Balances and Capital Flows : The Ecb's Rescue Facility
Sinn, Hans-Werner - 2011
The European Monetary Union is stuck in a severe balance-of-payments imbalance of a nature similar to the one that destroyed the Bretton Woods System. Greece, Ireland, Portugal, Spain and Italy have suffered from balance-of-payments deficits whose accumulated value, as measured by the Target...
Persistent link: https://www.econbiz.de/10013118098
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History Remembered : Optimal Sovereign Default on Domestic and External Debt
D'Erasmo, Pablo - 2018
. Calibrated to Eurozone data, the model is consistent with key long-run and debt-crisis statistics. Defaults are rare (1.2 percent …
Persistent link: https://www.econbiz.de/10012910653
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Quantitative Sovereign Default Models and the European Debt Crisis
Bocola, Luigi - 2018
A large literature has developed quantitative versions of the Eaton and Gersovitz (1981) model to analyze default episodes on external debt. In this paper, we study whether the same framework can be applied to the analysis of debt crises in which domestic public debt plays a prominent role. We...
Persistent link: https://www.econbiz.de/10012911701
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Kicking the Can Down the Road : Government Interventions in the European Banking Sector
Acharya, Viral V.; Borchert, Lea; Jager, Maximilian; … - 2022
We analyze the determinants and the long-run consequences of government interventions in the eurozone banking sector … an econometric approach that addresses the endogeneity associated with governmental bailout decisions in identifying …
Persistent link: https://www.econbiz.de/10013295279
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The Euro and the Geography of International Debt Flows
Hale, Galina - 2014
Greater financial integration between core and peripheral EMU members not only had an effect on both sets of countries but also spilled over beyond the euro area. Lower interest rates allowed peripheral countries to run bigger deficits, which inflated their economies by allowing credit booms....
Persistent link: https://www.econbiz.de/10013055510
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Our currency, your problem? : the global effects of the euro debt crisis
Stracca, Livio - In: European economic review : EER 74 (2015), pp. 1-13
Persistent link: https://www.econbiz.de/10011522584
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Sovereign Debt, Government Myopia, and the Financial Sector
Acharya, Viral V. - 2011
What determines the sustainability of sovereign debt? We develop a model where myopic governments seek popularity but can nevertheless commit credibly to service external debt. They do not default when debt is low because they would lose access to debt markets and be forced to reduce spending;...
Persistent link: https://www.econbiz.de/10013119044
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Empirical Research on Sovereign Debt and Default
Tomz, Michael - 2013
In this essay we review the empirical literature about sovereign debt and default. As we survey the work of economists, historians, and political scientists, we also emphasize parallel developments by theorists and recommend steps to improve the correspondence between theory and data
Persistent link: https://www.econbiz.de/10013085914
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Sovereign Debt and Consumption Smoothing
Grossman, Herschel I. - 2008
This paper shows that whether or not a sovereign can borrow to smooth consumption depends both on how consumption smoothing is achieved, whether by contingent debt issuance or by contingent debt servicing, and on the exact nature of the penalty for debt repudiation. If a sovereign that...
Persistent link: https://www.econbiz.de/10012774949