We estimate various panel fiscal reaction functions, including those of the main categories of general government revenue and expenditure for 12 Euro area member states over the 1970-2013 period. We find that in the peripheral countries where sovereign bond yields decreased sharply in the years...

We estimate various panel fiscal reaction functions, including those of the main categories of general government revenue and expenditure for 12 Euro area member states over the 1970-2013 period. We find that in the peripheral countries where sovereign bond yields decreased sharply in the years...

This paper adds to the literature on the impact of non-residents’ activity in the markets for sovereign debt issued by emerging economies. The conducted study indicates that there exists a statistically significant long-run relationship between the amount of emerging countries’ debt held by...

This paper examines the non-linear effects of public debt on economic growth in Asian developing economies using panel Generalized Method of Moments (GMM) regressions and panel vector autoregression (VAR) models. We find a statistically significant non-linear effect of public debt (as a percent...

The history of debt relief is now particularly long, the associated costs are soaring and the outcomes are at least uncertain. This paper reviews and provides new evidence on the effects of recent debt relief programs on different macroeconomic indicators in developing countries, focusing on the...

In this paper we stress the limits of the current debt sustainability framework used in the IMF-WB HIPC Initiative and the necessity to include domestic public debt into the analysis. The standard sustainability analysis does not take into account the fully-fledged budget constraint and the...

We examine the effect of firm credit rating downgrades on the pricing and structure of syndicated bank loans following rating downgrades in the firms’ countries of domicile. We find that the sovereign ceiling policies used by credit rating agencies create a disproportionally adverse impact on...

In June 2009, Romania’s public debts rose by 12.6% more than late last year, that is up to 123.61 billion Lei (29.4 billion Euros), meaning 23.27% of the gross domestic product originally estimated for this year. Foreign loans are not a new phenomenon. Yet, in the current economic context, it...

Heavy indebtedness and debt service payments, indicated by debt magnitudes and shares to national budgets, revenues, or outputs, mean that spending for public infrastructure and basic services is crowded out, even as they entail more borrowings in order to timely meet debt obligations. The...

Given that sovereign bond markets may be vulnerable to multiple equilibria and self-fulfilling prophecies, a debate exists over whether and in what way credit rating agencies (CRAs) are politically biased and may weaponize sovereign credit ratings. Recent research by Fuchs and Gehring (2017)...