Eurozone Prices: A Tale of Convergence and Divergence

Abstract

The Working Paper Series seeks to disseminate original research in economics and fi nance. All papers have been anonymously refereed. By publishing these papers, the Banco de España aims to contribute to economic analysis and, in particular, to knowledge of the Spanish economy and its international environment.The opinions and analyses in the Working Paper Series are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Banco de España or the Eurosystem.The Banco de España disseminates its main reports and most of its publications via the Internet at the following website: http://www.bde.es.Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged.

Macro-financial Interactions in a Changing World

“…In this regard, most of the studies have looked at the US outward spillover, finding that US financial and real shocks matter significantly for the rest of the world. Using a structural VAR model for pre-2008 data, Bayami and Thahn Bui (2010) find that international business cycles are largely driven by US financial shocks, with minor role for shocks from other advanced economies. Miranda-Agrippino and Rey (2018) equally find that there are large financial spillovers from the US to the rest of the world.…”

“…10 10 For instance, Gravelle et al (2006) find evidence of shift-contagion across currency markets, but not bond markets. Dungey et al (2010) find that the degree of shift-contagion depends on the crisis, with higher levels during subprime US 2007 crises or the 1998 Russian/LTCM crisis. 11 In the empirical applications, we assume k = 2.…”

Economic Consequences of High Public Debt: Evidence from Three Large Scale DSGE Models

“…Those who participate may find a job in the private or in the public sector or stay unemployed. Unemployment is modelled in line with Galí (2010) and Galí et al (2011). Hence, households receive interest and wage payments, unemployment benefits and other fiscal transfers, and they pay taxes.…”

“…For instance, the current debt sustainability analysis framework of the IMF (in place since 2013) adopts a debt ratio of 85% of GDP to flag fiscal risks in advanced economies along this dimension. 8 See Codogno et al (2003), Attinasi et al (2010) and Corsetti et al (2013) for the effect on spreads and Laubach (2009), Baum et al (2012) for the effect on long-term sovereign interest rates. 9 See De Bonis and Stacchini (2013) for the impact on bank credit and Jorda et al (2016) for the effects in the aftermath of crises.…”

Real-time Weakness of the Global Economy: A First Assessment of the Coronavirus Crisis

“…The last Global Financial Crisis has had ramifications that, arguably, can be seen to this day across the globe. Europe has been no exception: it has witnessed a dramatic recession in [2008][2009] across the euro area and the Sovereign Debt Crisis in [2009][2010][2011][2012]; ever since, it has been plagued by lacklustre growth that has turned resistant to a plethora of unprecedented nonconventional monetary and fiscal stimuli. More recently, there has been growing concern among academics and policy-makers about a new recessionary phase.…”