Debt developments and fiscal adjustment in the EU

Cafiso, Gianluca

doi:10.1007/s10272-012-0407-x

Cited by 23 publications

(17 citation statements)

References 3 publications

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“…For some, the immense increase in government bond risk premia are the main cause of the ongoing 'Euro crisis', requiring fiscal adjustments impossible to be achieved without adverse growth effects. Yet, although the short-run liquidity and the long-run solvency of governments are surely much affected by adverse financial market reactions, the evidence provided here is to argue that the 'Euro crisis' is not fundamentally based on such market reactions (see also Cafiso 2012). And others regard goverment bond risk premia merely as the consequence of unsolid fiscal behaviour in the past.…”

Section: Source: European Commission (2009b)mentioning

confidence: 97%

Governance without government or: The Euro Crisis and what went wrong with European Economic Governance?

Heise¹

2015

Europe at a Crossroad

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe Great Recession after 2008 did not turn out to be as deep and severe as the Great Depression of the 1930s. According to the European Commission, this positive result is due to the fact that economic policy-makers around the world learnt their lessons from the Great Depression in stabilizing their financial systems and, moreover, that particularly the European Union and its economic governance system has become a shelter against negative external shocks in coordinating stabilization policies to maintain aggregate demand.This paper argues that the claim of the European Commission needs some qualifications: on the one hand, the lessons have not been applied appropriately in all EU and, particularly, Eurozone Member States. This is, on the other hand, not merely the result of mismanagement of individual governments but the systematic outcome of an ineffective and even counterproductive European economic governance system. Although, in the wake of the Euro Crisis some crisis control and emergency measures have been established, crisis resolution has failed as the core of the inefficient governance system -the European Stability and Growth Pact (ESGP) -has not been reformed adequately.

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Section: Source: European Commission (2009b)mentioning

confidence: 97%

Governance without government or: The Euro Crisis and what went wrong with European Economic Governance?

Heise¹

2015

Europe at a Crossroad

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“…Indeed, the interest rate at time t determines (marginally) the interest bill and reflects the conditions for debt roll‐over (Escolano, ). The interest bill is usually the larger contributor to the debt‐to‐GNP ratio variation (Cafiso, ; Cottarelli and Schaechter, ). Unlike the transfer of resources effect, which may influence only indirectly medium‐to‐long‐term growth, the interest rate determines directly the interest bill that must be paid at each maturity and thus represents a certain burden on the overall balance.…”

Section: Debt Sustainability and Nrhmentioning

confidence: 99%

Non‐residents’ Holdings, Market Volatility and Public Debt Sustainability. An Analysis with Data for Italy

Cafiso

2016

Rev International Economics

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Non-residents' holdings (NRH) of debt securities have been large in euro area countries, but during the euro area debt crisis some of those countries experienced a steep contraction of such holdings. The analysis aims to provide a data-founded explanation of what is behind the decrease observed in 2011 by testing two alternative hypotheses. At the same time, we discuss how that decrease might have endangered the sustainability of public debt and study the empirical relevance of the most important of those processes. The topics presented refer to any advanced economy, but we check the hypotheses discussed by taking Italy as a case study because of data constraints. Italy is an interesting country to consider since it is a very large debt issuer. Our results point towards the importance of market volatility to explain variations of NRH, but those holdings do not seem to influence debt sustainability.Non-residents' holdings of public debt within the EA have been favored by the introduction of the common currency in 1999 (Lane, 2006), which boosted demand for NON-RESIDENTS' HOLDINGS AND PUBLIC DEBT 485

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“…Large-scale public debt not only threatens fiscal sustainability (Ghosh et al, 2013), but also affects financial stability (Cafiso, 2012) and ultimately is not conducive to long-term economic growth (Reinhart & Gogoff, 2011). Different from the public debt problem at central government level of the typical market economy countries in Europe and America, Chinese government's debt problem is mainly concentrated at local government level, 2 and the potential risks are more extensive and concealed.…”

Section: Introductionmentioning

confidence: 99%

Local Government Debt, Financing Platform and Fiscal Risk

Wang¹,

Pan²

2019

IBR

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The excessive expansion of local financing platform as a substantive medium for local government borrowing has aggravated local government financial risks, which may induce systemic financial risks. Based on the current debt situation of the central and provincial governments, this paper uses different measurement models to calculate debt balance and default risks of the financing platforms. The results show that nearly one-third of the provinces may have potential financial risks, therefore the central government and local governments should work together and keep four kinds of balances in order to prevent and defuse risks.

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Debt developments and fiscal adjustment in the EU

Cited by 23 publications

References 3 publications

Governance without government or: The Euro Crisis and what went wrong with European Economic Governance?

Governance without government or: The Euro Crisis and what went wrong with European Economic Governance?

Non‐residents’ Holdings, Market Volatility and Public Debt Sustainability. An Analysis with Data for Italy

Local Government Debt, Financing Platform and Fiscal Risk

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