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... working through the supply of bonds and potentially through taxation. In either case, the government’s problem is to manage the overall portfolio of marketable liabilities (bonds), implicit liabilities (pension promises), and financial assets (trust funds, if any). The management of the government’s ...
... working through the supply of bonds and potentially through taxation. In either case, the government’s problem is to manage the overall portfolio of marketable liabilities (bonds), implicit liabilities (pension promises), and financial assets (trust funds, if any). The management of the government’s ...
Self-Fulfilling Crises in the Eurozone: An Empirical Test
... There is a self-fulfilling element in this dynamics. When investors fear default, they act in such a way that default becomes more likely. A country can become insolvent because investors fear default. The problem of member countries of a monetary union described above is similar to the problems fac ...
... There is a self-fulfilling element in this dynamics. When investors fear default, they act in such a way that default becomes more likely. A country can become insolvent because investors fear default. The problem of member countries of a monetary union described above is similar to the problems fac ...
Income Distribution, Household Debt, and Aggregate
... loans. In this view, households borrow in order to achieve a path of consumption different from their path of income. The classic example is Samuelson (1959).1 In the conventional version, lifetime consumption is still equal to lifetime income; consumption is just being shifted over the lifecycle. I ...
... loans. In this view, households borrow in order to achieve a path of consumption different from their path of income. The classic example is Samuelson (1959).1 In the conventional version, lifetime consumption is still equal to lifetime income; consumption is just being shifted over the lifecycle. I ...
Paper
... potentially through taxation. In either case, the government’s problem is to manage the overall portfolio of marketable liabilities (bonds), implicit liabilities (pension promises), and financial assets (trust funds, if any). The management of the government’s portfolio raises three main issues. Fir ...
... potentially through taxation. In either case, the government’s problem is to manage the overall portfolio of marketable liabilities (bonds), implicit liabilities (pension promises), and financial assets (trust funds, if any). The management of the government’s portfolio raises three main issues. Fir ...
Fiscal and Monetary Policy in Australia: an SVAR Model
... defending many economies from the ravages of the Global Financial Crisis (GFC) of 2007-08. In the case of Australia, a significant fiscal stimulus package of $A42billion (approximately 4% of annual GDP) was launched in 2008 in an attempt to forestall a potential recession. At the same time, around t ...
... defending many economies from the ravages of the Global Financial Crisis (GFC) of 2007-08. In the case of Australia, a significant fiscal stimulus package of $A42billion (approximately 4% of annual GDP) was launched in 2008 in an attempt to forestall a potential recession. At the same time, around t ...
Monetary Policy Coordination, Monetary Integration and Other Essays
... called asymmetric because it increases the quantity demanded for labor and capital in one country (A) and lowers it in the other (B). With flexible prices, the reduction of the quantity demanded lowers real wages and rents in country B, and unemployment is not an issue. If prices are not flexible bu ...
... called asymmetric because it increases the quantity demanded for labor and capital in one country (A) and lowers it in the other (B). With flexible prices, the reduction of the quantity demanded lowers real wages and rents in country B, and unemployment is not an issue. If prices are not flexible bu ...
The Impact of External Debt on Economic Growth in Ethiopia A
... Recently, in the liberalized regime, Ethiopian economic policy decisions are taken according to the aims set out in the Growth and Transformation Plan (GTP) and the government‟s economic strategy. Unfortunately this approach of promoting economic growth has caused the federal fiscal budget deficit t ...
... Recently, in the liberalized regime, Ethiopian economic policy decisions are taken according to the aims set out in the Growth and Transformation Plan (GTP) and the government‟s economic strategy. Unfortunately this approach of promoting economic growth has caused the federal fiscal budget deficit t ...
Sovereign Risk: Global and Local Factors
... In general, emerging markets were able to cope with the crisis fairly well. This was in part because emerging markets were not as exposed to toxic assets influenced by the subprime collapse and by the massive fiscal and monetary stimulus that most of these economies implemented as a response. Emergi ...
... In general, emerging markets were able to cope with the crisis fairly well. This was in part because emerging markets were not as exposed to toxic assets influenced by the subprime collapse and by the massive fiscal and monetary stimulus that most of these economies implemented as a response. Emergi ...
Jamaica: Fifth Review Under the Extended Fund
... and the secondary market in Source: Bank of Jamaica. government bonds has remained 1/ Commercial banks, building societies, and merchant banks. 2/ Statutory liquid assets/prescribed liabilities. 3/ If not end-quarter, data corresponds to last quarter. inactive since the February 2013 debt 4/ The sig ...
... and the secondary market in Source: Bank of Jamaica. government bonds has remained 1/ Commercial banks, building societies, and merchant banks. 2/ Statutory liquid assets/prescribed liabilities. 3/ If not end-quarter, data corresponds to last quarter. inactive since the February 2013 debt 4/ The sig ...
Risk-Adjusted Performance of Private Equity Investments
... risk measures are thus attributed to cash flow distributions, rather than to any inherent characteristic of the investment. By providing specific information on particular PE fund transactions, our dataset permits us to analyse transactions on a deal-by-deal basis, thus making it possible to determ ...
... risk measures are thus attributed to cash flow distributions, rather than to any inherent characteristic of the investment. By providing specific information on particular PE fund transactions, our dataset permits us to analyse transactions on a deal-by-deal basis, thus making it possible to determ ...
Government Bonds and Their Investors
... (De Santis and Gerard, 2006). While increased cross-holdings may have contributed to the dramatic convergence of euro area yields when the euro was introduced, cross-holdings continued to increase even after and reversed only recently. In the United Kingdom, longterm yields declined following the in ...
... (De Santis and Gerard, 2006). While increased cross-holdings may have contributed to the dramatic convergence of euro area yields when the euro was introduced, cross-holdings continued to increase even after and reversed only recently. In the United Kingdom, longterm yields declined following the in ...
A Surplus of Ambition: Can Europe Rely on Large Primary
... alternative definition – surpluses averaging “only” 4 per cent for ten years – yields a total of just 5 such episodes. Given the small number of such cases, it would appear that these are not circumstances that are shared widely. What they have in common is a combination of strong external pressure ...
... alternative definition – surpluses averaging “only” 4 per cent for ten years – yields a total of just 5 such episodes. Given the small number of such cases, it would appear that these are not circumstances that are shared widely. What they have in common is a combination of strong external pressure ...
Financial integration and emerging markets capital
... that the weak financial and legal institutions in developing countries will force creditors to use short-term debt to monitor and discipline borrowers’ behavior.3 Schmukler and Vesperoni (2006) argue that if foreign creditors are more risk averse than domestic investors, the debt maturity structure ...
... that the weak financial and legal institutions in developing countries will force creditors to use short-term debt to monitor and discipline borrowers’ behavior.3 Schmukler and Vesperoni (2006) argue that if foreign creditors are more risk averse than domestic investors, the debt maturity structure ...
Capital Structure and Exporting
... Eaton et al for France, 2011; Bustos, 2011, for Argentina; Volchkova, 2011, for Russia; and others). At the same time larger …rms have more debt in capital structure (Frank and Goyal, 2009, among many). To some extent, our size variable controls for such a selection, but there may still be unobserve ...
... Eaton et al for France, 2011; Bustos, 2011, for Argentina; Volchkova, 2011, for Russia; and others). At the same time larger …rms have more debt in capital structure (Frank and Goyal, 2009, among many). To some extent, our size variable controls for such a selection, but there may still be unobserve ...
EMERGING SOVEREIGN GROUP, LLC
... The economic outlook remains bleak given the continued toxic combination of fiscal austerity, contracting bank lending, soaring unemployment, uncompetitive exchange rate, and structural rigidities. ...
... The economic outlook remains bleak given the continued toxic combination of fiscal austerity, contracting bank lending, soaring unemployment, uncompetitive exchange rate, and structural rigidities. ...
The Existence of Corporate Bond Clawbacks
... credit quality, issue characteristics, and time trends using a multivariate analysis. Results are robust to several definitions of credit quality. The rest of the paper is structured as follows. We present a simple model for IPOCs in Section 2. Section 3 illustrates a basic numerical analysis of the ...
... credit quality, issue characteristics, and time trends using a multivariate analysis. Results are robust to several definitions of credit quality. The rest of the paper is structured as follows. We present a simple model for IPOCs in Section 2. Section 3 illustrates a basic numerical analysis of the ...
Paper: "From NIC to TIC to RAY: Calculating True Lifetime Cost of
... ability to effectively refinance the original debt multiple times over the life of the project. We call an initial refunding of bonds originally issued to fund a project a “first generation” refunding. A refunding of the first generation refunding bonds is a “second generation” refunding. Figure 2 i ...
... ability to effectively refinance the original debt multiple times over the life of the project. We call an initial refunding of bonds originally issued to fund a project a “first generation” refunding. A refunding of the first generation refunding bonds is a “second generation” refunding. Figure 2 i ...
New Framework for Measuring and Managing Macrofinancial Risk and Financial Stability
... liabilities to external “shocks.” At the national level, the sectors of an economy are viewed as interconnected portfolios of assets, liabilities, and guarantees—some explicit and others implicit. Traditional approaches have difficulty analyzing how risks can accumulate gradually and then suddenly e ...
... liabilities to external “shocks.” At the national level, the sectors of an economy are viewed as interconnected portfolios of assets, liabilities, and guarantees—some explicit and others implicit. Traditional approaches have difficulty analyzing how risks can accumulate gradually and then suddenly e ...
Why the Operational Activity Ratio is so powerful
... measured by the curve, that there is a lot of excess US indebtedness over and above what is required for optimal US GDP production. In the US, the optimum long term relationship between debt and GDP is about $1.50:$1.00, a relationship that held for most of the 20th century until 1980 when debt rela ...
... measured by the curve, that there is a lot of excess US indebtedness over and above what is required for optimal US GDP production. In the US, the optimum long term relationship between debt and GDP is about $1.50:$1.00, a relationship that held for most of the 20th century until 1980 when debt rela ...
NBER WORKING PAPER SERIES NEW FRAMEWORK FOR MEASURING AND MANAGING MACROFINANCIAL
... liabilities to external “shocks.” At the national level, the sectors of an economy are viewed as interconnected portfolios of assets, liabilities, and guarantees—some explicit and others implicit. Traditional approaches have difficulty analyzing how risks can accumulate gradually and then suddenly e ...
... liabilities to external “shocks.” At the national level, the sectors of an economy are viewed as interconnected portfolios of assets, liabilities, and guarantees—some explicit and others implicit. Traditional approaches have difficulty analyzing how risks can accumulate gradually and then suddenly e ...
Optimal Time-Consistent Government Debt Maturity No. 16-4
... in the presence of shocks uses debt to smooth fiscal policy distortions. If fully contingent claims were available, there would be many maturity structures that would support the optimal policy. However, if the government can only issue noncontingent claims, then there is a unique maturity structure ...
... in the presence of shocks uses debt to smooth fiscal policy distortions. If fully contingent claims were available, there would be many maturity structures that would support the optimal policy. However, if the government can only issue noncontingent claims, then there is a unique maturity structure ...
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... (2002) and Buera and Nicolini (2004) shows that, even in the absence of contingent bonds, an optimally structured portfolio of non-contingent bonds can perfectly insulate the government from all shocks to the economy. Moreover, the work of Lucas and Stokey (1983) shows that, even if the government ...
... (2002) and Buera and Nicolini (2004) shows that, even in the absence of contingent bonds, an optimally structured portfolio of non-contingent bonds can perfectly insulate the government from all shocks to the economy. Moreover, the work of Lucas and Stokey (1983) shows that, even if the government ...
Foreign Currency Exposure and Hedging in Australia
... foreign currency assets relative to foreign currency liabilities (the converse is true for an appreciation). This is true even before any hedging of these foreign currency positions is taken into account. Notwithstanding the net foreign currency asset position for the economy as a whole, some indivi ...
... foreign currency assets relative to foreign currency liabilities (the converse is true for an appreciation). This is true even before any hedging of these foreign currency positions is taken into account. Notwithstanding the net foreign currency asset position for the economy as a whole, some indivi ...
Classes of Ratios
... Also take dividends shown on the income statement and adjust for changes in dividends payable on the Balance Sheet – a source, and therefore an add-back if it is an increase, or a use, and therefore a subtraction, if it declines. Calculate Net Cash Income. Subtract financing costs from Net Cash fr ...
... Also take dividends shown on the income statement and adjust for changes in dividends payable on the Balance Sheet – a source, and therefore an add-back if it is an increase, or a use, and therefore a subtraction, if it declines. Calculate Net Cash Income. Subtract financing costs from Net Cash fr ...
Chapter 10 The Bond Markets
... the principal amount is tied to the current rate of inflation to protect investor purchasing power • Treasury STRIPS: the coupon and principal payments are “stripped” from a T-Bond and sold as individual zero-coupon bonds. ...
... the principal amount is tied to the current rate of inflation to protect investor purchasing power • Treasury STRIPS: the coupon and principal payments are “stripped” from a T-Bond and sold as individual zero-coupon bonds. ...
Government debt
Government debt (also known as public debt, national debt and sovereign debt) is the debt owed by a central government. (In federal states, ""government debt"" may also refer to the debt of a state or provincial, municipal or local government.) By contrast, the annual ""government deficit"" refers to the difference between government receipts and spending in a single year, that is, the increase of debt over a particular year.Government debt is one method of financing government operations, but it is not the only method. Governments can also create money to monetize their debts, thereby removing the need to pay interest. But this practice simply reduces government interest costs rather than truly canceling government debt, and can result in hyperinflation if used unsparingly.Governments usually borrow by issuing securities, government bonds and bills. Less creditworthy countries sometimes borrow directly from a supranational organization (e.g. the World Bank) or international financial institutions.As the government draws its income from much of the population, government debt is an indirect debt of the taxpayers. Government debt can be categorized as internal debt (owed to lenders within the country) and external debt (owed to foreign lenders). Another common division of government debt is by duration until repayment is due. Short term debt is generally considered to be for one year or less, long term is for more than ten years. Medium term debt falls between these two boundaries. A broader definition of government debt may consider all government liabilities, including future pension payments and payments for goods and services the government has contracted but not yet paid.