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Niepelt, Dirk - 2008

I analyze how lack of commitment affects the maturity structure of sovereign debt. Governments balance benefits of default induced redistribution and costs due to income losses in the wake of a default. Their choice of short- versus long- term debt affects default and rollover decisions by...

Persistent link: https://www.econbiz.de/10011430074

Sovereign Risk and Bank Risk-Taking

Ari, Anil - 2015

In European countries recently hit by a sovereign debt crisis, the share of domestic sovereign debt held by the national banking system has sharply increased. This paper examines the banking equilibrium in a model with optimizing banks and depositors, deriving implications for economic...

Persistent link: https://www.econbiz.de/10013370119

ECB worries/European woes: The economic consequences of parochial policy

Barbera, Robert J.; Holtham, Gerald - 2012

Financial market crises with the threat of a subsequent debt-deflation depression have occurred with increasing regularity in the United States from 1980 through the present. Almost reflexively, when confronted with such circumstances, US institutions and the policymakers that run them have...

Persistent link: https://www.econbiz.de/10010318632

What is the risk of European sovereign debt defaults? Fiscal space, CDS spreads and market pricing of ristk

Aizenman, Joshua; Hutchison, Michael; Jinjarak, Yothin - 2011

, focusing in particular on the five countries in the South-West Eurozone Periphery (Greece, Ireland, Italy, Portugal, and Spain … emergence of TED spread as a key pricing factor. However, risk-pricing of the South-West Eurozone Periphery countries is not …. We find that Eurozone periphery default risk is priced much higher than the matched countries in 2010, even allowing for …

Persistent link: https://www.econbiz.de/10010287785

Can this time be different? Policy options in times of rising debt

Kose, M. Ayhan; Nagle, Peter; Ohnsorge, Franziska; … - 2020

Episodes of debt accumulation have been a recurrent feature of the global economy over the past fifty years. Since 2010, emerging and developing economies have experienced another wave of historically large and rapid debt accumulation. Similar past debt buildups have often ended in widespread...

Persistent link: https://www.econbiz.de/10012388936

Seismic shifts in economic theory and policy: From the Bernanke Doctrine to Modern Money Theory

Tcherneva, Pavlina R.; Tymoigne, Éric - 2024

This paper evaluates the relationship between monetary and fiscal policy and the relative effectiveness of macroeconomic stabilization through the lens of Modern Money Theory (MMT). We articulate previously-neglected aspects of monetary sovereignty to offer a new interpretation of the Bernanke...

Persistent link: https://www.econbiz.de/10015189231

Unconventional monetary policy and bond market connectedness in the new normal

Akovalı, Umut; Yılmaz, Kamil - 2021

Since the global financial crisis, major central banks gradually switched to unconventional monetary policies (UMPs) as part of their efforts to directly influence the long-term interest rates. This study analyzes the impact of conventional/unconventional monetary policies on sovereign bond...

Persistent link: https://www.econbiz.de/10012628453

The Overhang Hangover

Imbs, Jean; Ranciere, Romain - Institut für Schweizerisches Bankwesen <Zürich> - 2005

We revisit the debt overhang question. We first use non-parametric techniques to isolate a panel of countries on the downward sloping section of a debt Laffer curve. In particular, overhang countries are ones where a threshold level of debt is reached in sample, beyond which (initial) debt ends...

Persistent link: https://www.econbiz.de/10005858241

Did Genoa and Venice Kick a Financial Revolution in the Quattrocento?

Fratianni, Michele; Spinelli, Franco - 2006

Did the city-states of Genoa and Venice kick a financial revolution all the way back in the Quattrocento, much sooner than the financial revolutions of the Netherlands, England and America? To answer this question we analyze the classic revolutions in terms of three key criteria: credibility of...

Persistent link: https://www.econbiz.de/10013370029

Optimal fiscal policy and sovereign debt crises

Niemann, Stefan; Pichler, Paul - 2017

This paper studies how sovereign risk – both fundamental and self-fulfilling – shapes the cyclical behavior of optimalfiscal policy. We develop a model with endogenous default costs where market sentiment can induce belief-driven debt rollover crises. Optimal taxes and public spending are...

Persistent link: https://www.econbiz.de/10013370135