We investigate the effects of official fiscal data and creative accounting signals on interest rate spreads between bond yields in the European Union. Our model predicts that risk premia contained in government bond spreads should increase in both the official fiscal position and the expected...

This study argues that insurance is a much more pervasive motive of government activity than is commonly thought; one associated with great benefits but also great risks. From the start of public social insurance in the late 19th century, social insurance has come a long way to...