We investigate the effects of official fiscal data and creative accounting signals on interest rate spreads between bond yields in the European Union. Our model predicts that risk premia contained in government bond spreads should increase in both, the official fiscal position and the expected...

Machine generated contents note: List of Tables * List of Figures * Foreword * Acknowledgements * List of Contributors * Introduction--J.Ayuso-i-Casals, S.Deroose, E.Flores& L.Moulin * PART I: FISCAL RULES AND INSTITUTIONS AS USEFUL DEVICES TO ADDRESS THE DEFICIT BIAS * Dealing With the Deficit...