Discussion Paper
... countries and which determine their ability to service their debt. This can lead to debt crises and even sovereign debt defaults, which require costly and socially taxing debt restructuring processes, for both debtor countries and creditors. It also tends to favour the pro-cyclicality of fiscal poli ...
... countries and which determine their ability to service their debt. This can lead to debt crises and even sovereign debt defaults, which require costly and socially taxing debt restructuring processes, for both debtor countries and creditors. It also tends to favour the pro-cyclicality of fiscal poli ...
ECB move `may hurt investors`
... snap a three-day losing streak as rate-sensitive stocks such as IDFC Limited jumped after Standard and Poor’s raised India’s sovereign credit outlook to “stable” from “negative”. The S&P said the government mandate and improved political setting offered a conducive environment for reforms in Asia’s ...
... snap a three-day losing streak as rate-sensitive stocks such as IDFC Limited jumped after Standard and Poor’s raised India’s sovereign credit outlook to “stable” from “negative”. The S&P said the government mandate and improved political setting offered a conducive environment for reforms in Asia’s ...
HOW TO REFORM THE EUROPEAN CENTRAL BANK Jean-Paul Fitoussi and Jérôme Creel
... room for national economic policies even more. The logic of Europe’s economic ‘constitution’ is thus to push the continent towards an increasingly liberal economy, through EU institutions that do not have a choice in this matter. They have the power to increase the intensity of competition within th ...
... room for national economic policies even more. The logic of Europe’s economic ‘constitution’ is thus to push the continent towards an increasingly liberal economy, through EU institutions that do not have a choice in this matter. They have the power to increase the intensity of competition within th ...
Belief Regimes and Sovereign Debt Crises
... spans the period 1993Q4 through 2014Q4, and includes data from 20 emerging markets: Argentina, Brazil, Bulgaria, Chile, Columbia, Hungary, India, Indonesia, Latvia, Lithuania, Malaysia, Mexico, Peru, Philippines, Poland, Romania, Russia, South Africa, Turkey, and Ukraine. For each of these economies ...
... spans the period 1993Q4 through 2014Q4, and includes data from 20 emerging markets: Argentina, Brazil, Bulgaria, Chile, Columbia, Hungary, India, Indonesia, Latvia, Lithuania, Malaysia, Mexico, Peru, Philippines, Poland, Romania, Russia, South Africa, Turkey, and Ukraine. For each of these economies ...
Whither growth in central and eastern Europe? Policy lessons
... at the Stockholm School of Economics since August 2006. He is also a board member of the Swedish International Development Cooperation Agency, chairman of the board of the Kyiv Economics Institute (Ukraine) and CenEA in Poland, and a member of the International Faculty Committee at the International ...
... at the Stockholm School of Economics since August 2006. He is also a board member of the Swedish International Development Cooperation Agency, chairman of the board of the Kyiv Economics Institute (Ukraine) and CenEA in Poland, and a member of the International Faculty Committee at the International ...
Contagion of Sovereign Default Risk: the Role of Two Financial
... The interaction of credit conditions for sovereign borrowers and lenders associated with the two financial frictions is a key mechanism for contagion of sovereign default in the model. Contagion occurs in the following way. Suppose that a bad income shock hits a country (Greece), which leads to an ...
... The interaction of credit conditions for sovereign borrowers and lenders associated with the two financial frictions is a key mechanism for contagion of sovereign default in the model. Contagion occurs in the following way. Suppose that a bad income shock hits a country (Greece), which leads to an ...
Portugal: Ex Post Evaluation of Exceptional Access Under the
... manageable. In view of the authorities’ intention to repay the Fund early, they underscored the importance of maintaining adequate cash buffers. Directors considered the 2016 budget deficit target, 2.2 percent of GDP, to be appropriately ambitious, yet noted the difficulties in achieving this target ...
... manageable. In view of the authorities’ intention to repay the Fund early, they underscored the importance of maintaining adequate cash buffers. Directors considered the 2016 budget deficit target, 2.2 percent of GDP, to be appropriately ambitious, yet noted the difficulties in achieving this target ...
understanding monetary policy series no 36 public debt
... whose payment would be settled within a fiscal year in which the transaction is conducted. Gross External Debt, is the outstanding amount of those actual current, and not contingent, liabilities that require payment(s) of principal and/or interest by the debtor-country at some point(s) in the future ...
... whose payment would be settled within a fiscal year in which the transaction is conducted. Gross External Debt, is the outstanding amount of those actual current, and not contingent, liabilities that require payment(s) of principal and/or interest by the debtor-country at some point(s) in the future ...
The determinants of government bond yield spreads in
... goal of creating a standardized European public debt market. Indeed, euro-area governments have witnessed a considerable narrowing in their borrowing costs following the introduction of the single currency. However, the financial crisis has marked the beginning of a turnaround in the EMU government ...
... goal of creating a standardized European public debt market. Indeed, euro-area governments have witnessed a considerable narrowing in their borrowing costs following the introduction of the single currency. However, the financial crisis has marked the beginning of a turnaround in the EMU government ...
The size and composition of government debt in - ECB
... increased in association with the oil crises in the 1970s and the generalisation of social welfare policies in Europe since the 1980s. The problem this time is that government debt which accumulated during the last three decades was not fully offset in many cases during the “good times”. Moreover, g ...
... increased in association with the oil crises in the 1970s and the generalisation of social welfare policies in Europe since the 1980s. The problem this time is that government debt which accumulated during the last three decades was not fully offset in many cases during the “good times”. Moreover, g ...
Europe will work
... The European integration project, which began in the aftermath of the Second World War, and which has progressed step-bystep over more than 60 years, stands today at a critical juncture. The crisis in Europe has exposed a number of economic concerns with the 1999 monetary union – notably the lack of ...
... The European integration project, which began in the aftermath of the Second World War, and which has progressed step-bystep over more than 60 years, stands today at a critical juncture. The crisis in Europe has exposed a number of economic concerns with the 1999 monetary union – notably the lack of ...
documentos de trabajo
... The precipitous fall has several explanations. First, the net cancellation of debt that was encouraged by banks when they started to experience liquidity problems that eventually lead to a generalized bank run. Second, the strong growth of non-performing debt, which started to be written off in rece ...
... The precipitous fall has several explanations. First, the net cancellation of debt that was encouraged by banks when they started to experience liquidity problems that eventually lead to a generalized bank run. Second, the strong growth of non-performing debt, which started to be written off in rece ...
Italy - Marcello Minenna
... Currency matters: 90% correlation in Italy between productivity and FX since 1970 Italy’s current 20% average labour productivity (ALP) gap vs Germany and France stems from three periods: 1) 1979, when Italy entered the EMS with a +/-6% fluctuation boundary; 2) 1989, when it joined its peers in the ...
... Currency matters: 90% correlation in Italy between productivity and FX since 1970 Italy’s current 20% average labour productivity (ALP) gap vs Germany and France stems from three periods: 1) 1979, when Italy entered the EMS with a +/-6% fluctuation boundary; 2) 1989, when it joined its peers in the ...
The new debt trap - Jubilee Debt Campaign
... economy that depended on foreign lending, such as Ireland’s banks and housing market. But this was nothing new. From the Third World Debt Crisis of the 1980s and 1990s, to the Asian Financial Crisis in the mid-1990s, to the global financial crisis from 2008, large imbalances between countries fuel t ...
... economy that depended on foreign lending, such as Ireland’s banks and housing market. But this was nothing new. From the Third World Debt Crisis of the 1980s and 1990s, to the Asian Financial Crisis in the mid-1990s, to the global financial crisis from 2008, large imbalances between countries fuel t ...
Reinhart and Rogoff
... focuses on the percentage increase in debt, rather than the debt-to-GDP ratio, because steep output drops sometimes complicate the interpretation of debt–GDP ratios. As Reinhart and Rogoff (2008) note, the characteristic huge buildups in government debt are driven mainly by sharp falloffs in tax rev ...
... focuses on the percentage increase in debt, rather than the debt-to-GDP ratio, because steep output drops sometimes complicate the interpretation of debt–GDP ratios. As Reinhart and Rogoff (2008) note, the characteristic huge buildups in government debt are driven mainly by sharp falloffs in tax rev ...
Policy Contribution
... Fiscal stabilisation is the use of fiscal policy to support the economy through higher spending or lower taxes in a downturn, and to eliminate the budget deficit in an upturn. Fiscal policy is important at the country level to cater for country-specific shocks and at the federal level in circumstanc ...
... Fiscal stabilisation is the use of fiscal policy to support the economy through higher spending or lower taxes in a downturn, and to eliminate the budget deficit in an upturn. Fiscal policy is important at the country level to cater for country-specific shocks and at the federal level in circumstanc ...
Sovereign Debt Without Default Penalties
... In this paper we consider an alternative (extreme) case where no penalty for default is implementable, so that sovereign debt must be supported by an entirely different incentive scheme. The main idea is that sovereign debt is structured so that it is in the best interest of the median voter to serve ...
... In this paper we consider an alternative (extreme) case where no penalty for default is implementable, so that sovereign debt must be supported by an entirely different incentive scheme. The main idea is that sovereign debt is structured so that it is in the best interest of the median voter to serve ...
This PDF is a selection from a published volume from... National Bureau of Economic Research
... The events of the 1980s and 1990s in Japan suggest that when a government becomes strapped for funds, it will tend to borrow from the world credit market rather than raise taxes to finance additional public spending. Indeed, many governments did either not raise broadly based taxes (e.g., the Thatch ...
... The events of the 1980s and 1990s in Japan suggest that when a government becomes strapped for funds, it will tend to borrow from the world credit market rather than raise taxes to finance additional public spending. Indeed, many governments did either not raise broadly based taxes (e.g., the Thatch ...
Debt, Recovery Rates and the Greek Dilemma - Eureka
... creditor’s expectations about the ability of Greeks to honour their contractual obligations radically changed, and, therefore, credit-spreads rose steeply. In addition, a temporary relative decline in productive efficiency, moved the economy from growth and stability to contraction and instability. ...
... creditor’s expectations about the ability of Greeks to honour their contractual obligations radically changed, and, therefore, credit-spreads rose steeply. In addition, a temporary relative decline in productive efficiency, moved the economy from growth and stability to contraction and instability. ...
Managing Public Debt and Its Financial Stability Implications
... Although the models developed in these papers allow for analysis in both closed- and openeconomy settings, the models have been applied primarily to open-economy settings, which allow researchers to get a better handle on the dynamics of the development of capital account crises. Clearly, however, u ...
... Although the models developed in these papers allow for analysis in both closed- and openeconomy settings, the models have been applied primarily to open-economy settings, which allow researchers to get a better handle on the dynamics of the development of capital account crises. Clearly, however, u ...
Should the Maastricht fiscal criteria be redefined?
... government controlled entities are classified outside general government due to their behaviour as market units. However, because of the control established over these corporations, it is certain that the government would assume their liabilities if they fell into financial difficulties. Moreover, c ...
... government controlled entities are classified outside general government due to their behaviour as market units. However, because of the control established over these corporations, it is certain that the government would assume their liabilities if they fell into financial difficulties. Moreover, c ...
The Euro and the Geography of International Debt Flows
... after 1999 because these set the stage for the euro area crisis.3 One mechanism generating the big current account deficits of the European periphery could be summarized as follows: after EMU (and even in the immediately preceding years), compression of bond spreads in the euro area periphery encour ...
... after 1999 because these set the stage for the euro area crisis.3 One mechanism generating the big current account deficits of the European periphery could be summarized as follows: after EMU (and even in the immediately preceding years), compression of bond spreads in the euro area periphery encour ...
The Economic Adjustment Programme for Portugal
... worsening economic outlook, amid a sharp deterioration in global economic and financial conditions. This led to rising pressures on the external financing of Portuguese debt with sharp increases in interest rates, reflecting a deterioration of confidence among investors and divergent developments ac ...
... worsening economic outlook, amid a sharp deterioration in global economic and financial conditions. This led to rising pressures on the external financing of Portuguese debt with sharp increases in interest rates, reflecting a deterioration of confidence among investors and divergent developments ac ...
Growth in a Time of Debt
... The simplest connection between public debt and growth is suggested by Robert Barro (1979). Assuming taxes ultimately need to be raised to achieve debt sustainability, the distortionary impact imply is likely to lower potential output. Of course, governments can also tighten by reducing spending, wh ...
... The simplest connection between public debt and growth is suggested by Robert Barro (1979). Assuming taxes ultimately need to be raised to achieve debt sustainability, the distortionary impact imply is likely to lower potential output. Of course, governments can also tighten by reducing spending, wh ...
characteristics, correction and challenges
... the debt levels of households and non-financial corporations in the advanced economies increased markedly. In Spain this phenomenon became notably acute and debt ratios higher than those observed in peer countries were recorded (see Chart 2.1). EMU membership prompted an upward revision of expected ...
... the debt levels of households and non-financial corporations in the advanced economies increased markedly. In Spain this phenomenon became notably acute and debt ratios higher than those observed in peer countries were recorded (see Chart 2.1). EMU membership prompted an upward revision of expected ...
European debt crisis
The European debt crisis (often also referred to as the Eurozone crisis or the European sovereign debt crisis) is a multi-year debt crisis that has been taking place in the European Union since the end of 2009. Several eurozone member states (Greece, Portugal, Ireland, Spain and Cyprus) were unable to repay or refinance their government debt or to bail out over-indebted banks under their national supervision without the assistance of third parties like other Eurozone countries, the European Central Bank (ECB), or the International Monetary Fund (IMF).The detailed causes of the debt crises varied. In several countries, private debts arising from a property bubble were transferred to sovereign debt as a result of banking system bailouts and government responses to slowing economies post-bubble. The structure of the eurozone as a currency union (i.e., one currency) without fiscal union (e.g., different tax and public pension rules) contributed to the crisis and limited the ability of European leaders to respond. European banks own a significant amount of sovereign debt, such that concerns regarding the solvency of banking systems or sovereigns are negatively reinforcing.As concerns intensified in early 2010 and thereafter, leading European nations implemented a series of financial support measures such as the European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM). The ECB also contributed to solve the crisis by lowering interest rates and providing cheap loans of more than one trillion euro in order to maintain money flows between European banks. On 6 September 2012, the ECB calmed financial markets by announcing free unlimited support for all eurozone countries involved in a sovereign state bailout/precautionary programme from EFSF/ESM, through some yield lowering Outright Monetary Transactions (OMT).Return to economic growth and improved structural deficits enabled Ireland and Portugal to exit their bailout programmes in July 2014. Greece and Cyprus both managed to partly regain market access in 2014. Their bailout programme is scheduled to end in March 2016. Spain never officially received a bailout programme. It's rescue package from the ESM was earmarked for a bank recapitalization fund and did not include financial support for the government itself.The crisis had significant adverse economic effects and labour market effects, with unemployment rates in Greece and Spain reaching 27%, and was blamed for subdued economic growth, not only for the entire eurozone, but for the entire European Union. As such, it can be argued to have had a major political impact on the ruling governments in 9 out of 19 eurozone countries, contributing to power shifts in Greece, Ireland, France, Italy, Portugal, Spain, Slovenia, Slovakia, and the Netherlands.