Internal financial imbalances within the Eurozone were central to the development of the European debt crisis. They resulted in a concentration of European periphery risks on the balance sheets of banks located in core Eurozone countries (Lane 2012, Rey 2012, Shin 2012).
How the euro changed the pattern of international debt flows
Galina Hale, Maurice Obstfeld, 15 May 2014
To end the Eurozone crisis, bury the debt forever
Pierre Pâris, Charles Wyplosz, 6 August 2013
The Eurozone’s debt crisis is getting worse despite appearances to the contrary.
Disaster economics and bond yields
Ziad Daoud, Martin Brookes, 16 August 2012
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.
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).
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