Document Server@UHasselt >
Research >
Research publications >

Please use this identifier to cite or link to this item: http://hdl.handle.net/1942/22489

Title: Effects of Eurobonds: A stochastic sovereign debt sustainability analysis for Portugal, Ireland and Greece
Authors: Tielens, J.
van Aarle, B.
Van Hove, J.
Issue Date: 2014
Citation: JOURNAL OF MACROECONOMICS, 42, p. 156-173
Abstract: This paper assesses the impact of Eurobonds on sovereign debt dynamics for selected European member states (Greece, Ireland and Portugal). For each member state, we produce sovereign debt fan charts of (i) a baseline scenario (no Eurobonds) and (ii) a Full-Fledged Eurobond introduction. The key building blocks of our methodology are (i) a debt framework (which embeds the traditional recursive debt equation), (ii) a vector autoregressive model to take into account and parametrise macroeconomic uncertainty and (iii) a fiscal reaction function. Conditional on the absence of moral hazard, we find Eurobonds to be a good instrument to absorb macroeconomic shocks and to diminish uncertainty over future debt forecasts; for Ireland and Portugal, we find debt to be 20 percentage points lower than under our baseline scenario, by 2020. (C) 2014 Elsevier Inc. All rights reserved.
Notes: [Tielens, J.; van Aarle, B.; Van Hove, J.] Katholieke Univ Leuven, Ctr Econ Studies, B-3000 Louvain, Belgium. [Tielens, J.; van Aarle, B.; Van Hove, J.] Katholieke Univ Leuven, Leuven Ctr Irish Studies, B-3000 Louvain, Belgium. [van Aarle, B.] Katholieke Univ Leuven, VIVES, B-3000 Louvain, Belgium. [van Aarle, B.] Ullasselt, B-3590 Diepenbeek, Belgium. [Van Hove, J.] HU Brussel, B-1000 Brussels, Belgium.
URI: http://hdl.handle.net/1942/22489
DOI: 10.1016/j.jmacro.2014.06.004
ISI #: 000347023700012
ISSN: 0164-0704
Category: A1
Type: Journal Contribution
Validation: ecoom, 2016
Appears in Collections: Research publications

Files in This Item:

Description SizeFormat
Published version681.13 kBAdobe PDF

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.