Sovereign Risk And Belief Driven Fluctuations In The Euro Area
Download Sovereign Risk And Belief Driven Fluctuations In The Euro Area full books in PDF, epub, and Kindle. Read online free Sovereign Risk And Belief Driven Fluctuations In The Euro Area ebook anywhere anytime directly on your device. Fast Download speed and no annoying ads. We cannot guarantee that every ebooks is available!
Sovereign Risk and Belief-Driven Fluctuations in the Euro Area
Author | : Giancarlo Corsetti |
Publisher | : International Monetary Fund |
Total Pages | : 49 |
Release | : 2013-11-06 |
Genre | : Business & Economics |
ISBN | : 1475516800 |
Download Sovereign Risk and Belief-Driven Fluctuations in the Euro Area Book in PDF, Epub and Kindle
Sovereign risk premia in several euro area countries have risen markedly since 2008, driving up credit spreads in the private sector as well. We propose a New Keynesian model of a two-region monetary union that accounts for this “sovereign risk channel.” The model is calibrated to the euro area as of mid-2012. We show that a combination of sovereign risk in one region and strongly procyclical fiscal policy at the aggregate level exacerbates the risk of belief-driven deflationary downturns. The model provides an argument in favor of coordinated, asymmetric fiscal stances as a way to prevent selffulfilling debt crises.
Sovereign Risk and Belief-Driven Fluctuations in the Euro Area Related Books
Pages: 49
Pages:
Pages: 25
Pages: 57
Pages: 609