Two-year bond yields in six European countries recently turned negative. The decline in bond yields has prompted a growing number of commentators to say that bonds are overvalued.
Disaster economics and bond yields
Ziad Daoud, Martin Brookes, 16 August 2012
The Italian situation: Clarification and a prediction
Alberto Alesina, Francesco Giavazzi, 13 September 2011
Under pressure from the bond market and the European Central Bank, Italy has adopted a budget that implies a sharp shift in fiscal stance.
Italy's confidence crisis: Bad policies from bad politicians
Tito Boeri, 17 August 2011
Three fiscal consolidation packages in six weeks—each more ambitious than the last—have failed to prevent a credibility crisis that has doubled the Italy’s risk premium. The problem was that none of the packages addressed the fundamental shortcomings of the first one—the one that started the credibility crisis.
Eurozone debt crisis: Reckless debtors or misguided rescuers?
Stefano Micossi, 29 May 2011
Our disgraceful leaders did it again. They managed to deeply unsettle financial markets by once again sparking off doubts on the orderly rollover of distressed sovereigns (Reguly 2011).
The European debt crisis: Worrisome delusions
Charles Wyplosz, 19 December 2010
Lorenzo Bini-Smaghi – Member of the ECB's Executive Board – has produced a brilliant defence of the no-default strategy currently pursued by the Eurozone authorities (Financial Times 2010).
His arguments are straightforward.
Sovereign defaults, banks and financial institutions
Nicola Gennaioli, Alberto Martin, Stefano Rossi, 17 November 2010
Recent sovereign defaults highlight a close link between government default and financial sector turmoil, where banks often take centre stage. In the Russian default of 1998 the government's suspension of debt payments triggered large losses on the balance sheets of Russian banks, which had heavily invested in public bonds.
Debt and growth revisited
Carmen M Reinhart, Kenneth Rogoff, 11 August 2010
Economics has been under fire since the recent crisis for enshrining abstract models that offer little connection to the real world.
It takes less than a sovereign default to cause instability
Fabio Panetta, Giuseppe Grande, 7 August 2010
According to many commentators a sovereign default could be the next stage of the crisis (Reinhart 2010, Rogoff 2010 and Reinhart and Rogoff 2010).
The Eurozone debt crisis: Facts and myths
Charles Wyplosz, 9 February 2010
Like any crisis, the new one generates myriads of misguided comments and reactions by journalists, financiers and policymakers. Ten myths that are frequently heard clash with ten facts that are frequently overlooked.
- Fiscal consolidation: At what speed?Blanchard, Leigh
- Public debt and economic growth, one more timePanizza, Presbitero
- Escaping liquidity traps: Lessons from the UK’s 1930s escapeCrafts
- The lessons of the North Atlantic crisis for economic theory and policyStiglitz
- Rethinking macroeconomic policyBlanchard
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
Reichlin, Baldwin, 14 April 2013
Reichlin, Turner, Woodford
CEPR Policy Research
- The "Greatest" Carry Trade Ever? Understanding Eurozone Bank RisksAcharya, Steffen
- Political Credit Cycles: The Case of the Euro ZoneFernández-Villaverde, Garicano, Santos
- Winning by Losing: Incentive Incompatibility in Multiple QualifiersDagaev, Sonin
- Income and schoolingBrückner, Gradstein
- Monetary Policy and Rational Asset Price BubblesGalí
- How the EZ crisis is permanently changing EU institutionsMicossi
- WTO 2.0: Global governance of supply-chain tradeBaldwin
- Is US economic growth over? Faltering innovation confronts the six headwindsGordon
- The economic crisis: How to stimulate economies without increasing public debtWood
- Austerity: Too Much of a Good Thing?Corsetti