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Issuing GDP-linked bonds : supply and demand can match

Fournier, Jean-Marc; Lehr, Jakob - 2018

from GLBs and hence can accept a larger risk premium on GLBs. For the investors’ side, risk premia compensating for GDP … particular, the possible reduction in the default risk premium is ignored. Even so, both high-risk and low-risk countries can … benefit from GLBs: the ones that have to pay a larger risk premium are those that need this insurance against debt crises the …

Persistent link: https://www.econbiz.de/10011914308

Limits to government debt sustainability

Fournier, Jean-Marc; Fall, Falilou - 2015

The recent euro area sovereign debt crisis has shown the importance of market reactions for the sustainability of debt. The objective of this paper is to calculate endogenous government debt limits given the markets assessment of the probability to default. The estimated primary balance reaction...

Persistent link: https://www.econbiz.de/10011399483

Ensuring debt sustainability amid strong economic uncertainty in Hungary

Beynet, Pierre; Kierzenkowski, Rafał - 2012

Despite a deep recession in 2009 and weak growth in subsequent years, Hungary’s fiscal position compares favourably with many other OECD countries. Nonetheless, the underlying fiscal balance started deteriorating in 2010 and 2011. Recognising this, Hungary’s government launched an ambitious...

Persistent link: https://www.econbiz.de/10009690137

Bringing Belgian public finances to a sustainable path

Koźluk, Tomasz; Jousten, Alain; Høj, Jens - 2012

Economic growth is projected to be strengthening from mid-2011 onwards, but will be insufficient to restore the sustainability of public finances. The Belgian strategy to prefund ageing costs by generating fiscal surpluses to bring down public debt was derailed by the global crisis. Restoring...

Persistent link: https://www.econbiz.de/10009690151

Assessing the sensitivity of Hungarian debt sustainability to macroeconomic shocks under two fiscal policy reactions

Beynet, Pierre; Paviot, Edouard - 2012

Hungarian debt level has steadily increased since 2001, with the debt-to-GDP ratio reaching about 84% at end-2011. This high level combined with significant volatility of macroeconomic variable influencing potential future debt paths – GDP growth, exchange rate and interest spreads – put...

Persistent link: https://www.econbiz.de/10009690186

Portugal : solid foundations for a sustainable fiscal consolidation

Haugh, David; Sorbe, Stéphane - 2012

Owing to slow growth and a relatively weak fiscal position, Portugal’s public debt had been rising for almost a decade when the global crisis struck, sharply increasing the deficit. The loss of confidence in Portuguese and other euro area sovereign bonds required international financial...

Persistent link: https://www.econbiz.de/10009690910

Portugal : assessing the risks around the speed of fiscal consolidation in an uncertain environment

Sorbe, Stéphane - 2012

This paper illustrates possible trade-offs between two different fiscal consolidation strategies in Portugal: sticking to the nominal fiscal targets in the EU-IMF programme or allowing automatic stabilisers to work, while sticking to the structural primary deficit targets implied by the...

Persistent link: https://www.econbiz.de/10009690911

Debt and macroeconomic stability : debt and the business cycle

Ziemann, Volker - 2012

Using a large panel of OECD countries this paper studies the link between debt and macroeconomic stability by comparing the evolution of balance sheet aggregates and economic output in high- and lowdebt environments. While the relationship between debt and economic growth has been extensively...

Persistent link: https://www.econbiz.de/10009696437

Debt and macroeconomic stability : case studies

Merola, Rossana - 2012

Accumulating debt raises concerns about its implications for macroeconomic stability. This paper sheds light on the implications of high indebtedness for the macroeconomic volatility by identifying the main drivers of the evolution of debt in a set of countries. The country choice was based on...

Persistent link: https://www.econbiz.de/10009696439

Debt and macroeconomic stability

Sutherland, Douglas; Höller, Peter; Merola, Rossana; … - 2012

Debt levels have surged since the mid-1990s and have reached historic highs across the OECD. High debt levels can create vulnerabilities, which amplify and transmit macroeconomic and asset price shocks. Furthermore, high debt levels hinder the ability of households and enterprises to smooth...

Persistent link: https://www.econbiz.de/10009696443