The aggravating turbulences in the market for euro government bonds have so far precluded any recovery from the debt crisis. The key problem is that structural reforms and consolidation measures have long impact lags and are not able to stop an acute self-fulfilling crisis of confidence. In the...

This paper investigates whether exchange rate pass-through (ERPT) into import prices is a nonlinear phenomenon for five heavily indebted Euro area countries, namely the so-called GIIPS group (Greece, Ireland, Italy, Portugal, and Spain). Using logistic smooth transition models, we explore the...