Showing 1 - 10 of 1,874
With public debt soaring across the world, a growing concern is whether current debt levels are a harbinger of fiscal …
Persistent link: https://www.econbiz.de/10012170046
In 2007, countries in the Euro periphery were enjoying stable growth, low deficits, and low spreads. Then the financial crisis erupted and pushed them into deep recessions, raising their deficits and debt levels. By 2010, they were facing severe debt problems. Spreads increased and,...
Persistent link: https://www.econbiz.de/10014394354
Public and private sector balance sheets are an important component to any analysis of debt sustainability. A vulnerable and indebted private sector can become a sudden liability for the government; alternatively, resilient household and bank balance sheets may reveal potential sources of...
Persistent link: https://www.econbiz.de/10012613508
In this paper I assess the ability of econometric and machine learning techniques to predict fiscal crises out of sample. I show that the econometric approaches used in many policy applications cannot outperform a simple heuristic rule of thumb. Machine learning techniques (elastic net, random...
Persistent link: https://www.econbiz.de/10012612343
This study finds that equity returns in the banking sector in the wake of the Great Recession and the European sovereign debt crisis have been driven mainly by weak growth prospects and heightened sovereign risk and to a lesser extent, by deteriorating funding conditions and investor sentiment....
Persistent link: https://www.econbiz.de/10014412154
rational expectations equilibria. In one equilibrium, creditors’ pessimistic expectations about the borrower’s creditworthiness …
Persistent link: https://www.econbiz.de/10014398322
This paper studies the role of IMF-supported programs in mitigating the likelihood of subsequent sovereign defaults in borrowing countries. Using a panel of 106 developing countries from 1970 to 2016 and an entropy balancing methodology, we find that IMF-supported programs significantly reduce...
Persistent link: https://www.econbiz.de/10011996413
Is the seniority structure of sovereign debt neutral for a government's decision between defaulting and raising surpluses? In this paper, we address this question using a model of debt crises where a discretionary government endogenously chooses distortionary taxation and whether to apply an...
Persistent link: https://www.econbiz.de/10011852569
We explore a model intended to capture the interaction between exchange rate policy, fiscal policy, and outright default on foreign-currency denominated debt. We examine how the exchange rate affects the supply of short-term debt facing the government. We show that under a credible hard peg...
Persistent link: https://www.econbiz.de/10014403958
We develop an early-warning model of sovereign debt crises. A country is defined to be in a debt crisis if it is classified as being in default by Standard & Poor''s, or if it has access to nonconcessional IMF financing in excess of 100 percent of quota. By means of logit and binary recursive...
Persistent link: https://www.econbiz.de/10014403985