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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

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

Credibility For Sale

Dellas, Harris; Niepelt, Dirk - 2013

We develop a sovereign debt model with offcial and private creditors where default risk depends on both the level and the composition of liabilities. Higher exposure to offcial lenders improves incentives to repay but carries extra costs, such as reduced ex-post flexibility. The model implies...

Persistent link: https://www.econbiz.de/10011430101

Austerity

Dellas, Harris; Niepelt, Dirk - 2014

We shed light on the function, properties and optimal size of austerity using the standard sovereign debt model augmented to include incomplete information about credit risk. Austerity is defined as the shortfall of consumption from the level desired by a country and supported by its repayment...

Persistent link: https://www.econbiz.de/10011430112

The stock of external sovereign debt: Can we take the data at 'face value'?

Dias, Daniel A.; Richmond, Christine; Wright, Mark L. J. - 2014

The stock of sovereign debt is typically measured at face value. Defined as the undiscounted sum of future principal repayments, face values are misleading when debts are issued with different contractual forms or maturities. In this paper, we construct alternative measures of the stock of...

Persistent link: https://www.econbiz.de/10011460663

Debt and Economic Growth in Developing and Industrial Countries

Schclarek, Alfredo - 2004

This paper empirically explores the relationship between debt and growth for a number of developing and industrial economies. For developing countries, we find that lower total external debt levels are associated with higher growth rates, and that this negative relationship is driven by the...

Persistent link: https://www.econbiz.de/10013208488

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