Assessing sovereign default risk : a simulation based approach

Beatrice Mäder, joint with B. Griesbach

The second chapter aims to calculate maximum sustainable debt ratios in advanced economies. We estimate a model based on countries' economic fundamentals. The model incorporates feedback effects between interest rates and debt ratios, allows for multi-period debt and considers different fiscal policy scenarios. Simulation methods are used to solve the model. We apply the model to a sample of 17 advanced economies. Our simulation results suggest that in a number of industrial countries a continuation of current fiscal policies is not compatible with long-run debt sustainability.

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Year of publication:	2018
Authors:	Mäder, Beatrice ; Griesbach, Björn
Published in:	Essays in public economics. - St. Gallen. - 2018, p. 53-85
Subject:	Fiskalpolitik \| Verschuldungsgrenze \| Gesundheitsökonomie \| Säuglingssterblichkeit \| Qualifizierte Mehrheitserfordernisse \| Staatsschulden \| Monte Carlo Simulation \| Simulation \| Monte-Carlo-Simulation \| Monte Carlo simulation \| Länderrisiko \| Country risk \| Theorie \| Theory \| Staatsbankrott \| Sovereign default

Type of publication:	Article
Type of publication (narrower categories):	Aufsatz im Buch ; Book section
Language:	English
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011962714