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The Mystique Surrounding the Central Bank's Balance Sheet, Applied to the European Crisis

Reis, Ricardo - 2013

In spite of the mystique behind a central bank's balance sheet, its resource constraint bounds the dividends it can distribute by the present value of seignorage, which is a modest share of GDP. Moreover, the statutes of the Federal Reserve or the ECB make it difficult for it to redistribute...

Persistent link: https://www.econbiz.de/10013087884

Sovereign Debt Markets in Turbulent Times : Creditor Discrimination and Crowding-Out Effects

Broner, Fernando - 2013

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/10013072346

Insulation Impossible : Fiscal Spillovers in a Monetary Union

Cooper, Russell - 2010

This paper studies fiscal spillovers in a monetary union. The focus of the analysis is on the interaction between the fiscal policy of member countries (regions) and the central monetary authority. When capital markets are integrated, the fiscal policy of one country will influence equilibrium...

Persistent link: https://www.econbiz.de/10013151966

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

Machine Learning for Regularized Survey Forecast Combination : Partially-Egalitarian Lasso and its Derivatives

Diebold, Francis X. - 2018

Despite the clear success of forecast combination in many economic environments, several important issues remain incompletely resolved. The issues relate to selection of the set of forecasts to combine, and whether some form of additional regularization (e.g., shrinkage) is desirable. Against...

Persistent link: https://www.econbiz.de/10012911728

Notes on the Role of Target in a Stage Iii Crisis

Garber, Peter M. - 2010

When Stage III of EMU begins on January 1, 1999, member countries will irrevocably lock exchange rates, and interbank payments in euros will commence. Will the ensuing respite from Stage II instabilities be permanent or only the eye of the storm? Can Stage III itself be subject to an attack that...

Persistent link: https://www.econbiz.de/10012763602

Is it Too Late to Bail Out the Troubled Countries in the Eurozone?

Conesa, Juan Carlos - 2014

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 … to default rather than reduce their debt. A resumption of economic growth is one of the few ways that the Eurozone crises …

Persistent link: https://www.econbiz.de/10013058257

External and Public Debt Crises

Arellano, Cristina - 2015

The recent debt crises in Europe and the U.S. states feature similar sharp increases in spreads on government debt but also show important differences. In Europe, the crisis occurred at high government indebtedness levels and had spillovers to the private sector. In the United States, state...

Persistent link: https://www.econbiz.de/10013017501

A Model of Safe Asset Determination

He, Zhiguo - 2016

What makes an asset a “safe asset”? We study a model where two countries each issue sovereign bonds to satisfy investors' safe asset demands. The countries differ in the float of their bonds and their resources/fundamentals available to rollover debts. A sovereign's debt is more likely to be...

Persistent link: https://www.econbiz.de/10012991680

Saving Europe? : The Unpleasant Arithmetic of Fiscal Austerity in Integrated Economies

Mendoza, Enrique G. - 2014

What are the macroeconomic effects of tax adjustments in response to large public debt shocks in highly integrated economies? The answer from standard closed-economy models is deceptive, because they underestimate the elasticity of capital tax revenues and ignore cross-country spillovers of tax...

Persistent link: https://www.econbiz.de/10013046730

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