We use a panel of 11 EMU countries in the period 2000-2014 to assess the importance of political and economic determinants as explanatory factors in sovereign bond yield spreads. According to the results, there is evidence that those spread determinants gained importance after the beginning of...

This study investigates the evolution of central bank profits as fiscal revenue (or: seigniorage)before and in the aftermath of the global financial crisis of 2008–9, focusing on a select group ofcentral banks—namely the Bank of England, the United States Federal Reserve System, theBank of...

The paper analyses the linkages from financial developments to public finances. It maps and discusses the transmission channels to fiscal variables. These channels include asset prices, financing conditions, balance sheets of banks, non-banks and central banks and international linkages. The...

Does a shortage of safe assets sow the seeds of instability of financial system? This paper empirically explores the hypothesis of safe asset shortage-induced excess credit booms and financial instability. As an alternative step forward from the assumption of growth- or wealth-based demand for...

We quantify all statements by major European politicians reported by Reuters during the August 2011 to December 2011 period and show that political communication significantly affects European stock and bond markets as well as the EURUSD exchange rate. Communication with respect to Italy induces...

Government financial assets are increasingly recognized as playing an important role inassessing fiscal sustainability. However, very little research has been done on the dynamics ofgovernment financial assets compared to liabilities. In this paper, we investigate the impact ofrecent financial...

We consider how fear of model misspecification on the part of the planner and/or the households affects welfare gains from optimal macroprudential taxes in an economy with occasionally binding collateral constraints as in Bianchi (2011). On the one hand, there exist welfare gains from...

Monetary policy leaves a fiscal footprint. In some circumstances, relieving the fiscal burden becomes the main goal of policy, and inflation control is subordinate. This article notes that the same is true of macroprudential policy, and it characterizes the size and sign of its fiscal footprint,...