debt, also government debt and corporate debt are in some countries at levels not seen before. While there is a common … agreement that these high debt levels are not sustainable there is fewer consensus about the effect of changes in debt and … especially debt levels on aggregate demand. Based on a cross country study of 18 European countries we show that there is a …

I analyze how lack of commitment affects the maturity structure of sovereign debt. Governments balance benefits of …-term debt affects default and rollover decisions by subsequent policy makers. The equilibrium maturity structure is shaped by … revenue losses on inframarginal units of debt that reflect the price impact of these decisions. The model predicts an interior …

What is an optimal or a sustainable external debt - for a country, region or sector? How should one monitor and … evaluate debt to preclude a crisis? We use stochastic optimal control/dynamic programming to derive an optimal debt. The … explain the implications of DP. An explicit example is the US Agricultural debt crisis. …

’s production side and on welfare, but not on its stock of foreign debt and the country specific risk premium, and large part of the …The paper analyzes the dynamic effects of a total factor productivity shock and an interest rate risk premium shock in … adjustment happens in the short run. In contrast, a pure increase in the country specific risk premium causes substantial …

For a sample of sixteen OECD countries over the period 1980-2007 we show that, for given debt-GDP ratio, an increase in … the maturity of the public debt by one year lowers its long-term interest rate by around 20-30 basis points. This effect … is stronger for countries with higher average inflation or debt. …

This paper investigates the long-run effects of public debt and inflation on economic growth. Our contribution is both … over the 1965-2010 period, we find significant negative long-run effects of public debt and inflation on growth. Our … results indicate that, if the debt to GDP ratio is raised and this increase turns out to be permanent, then it will have …

leverage, the optimum and excessive risk and the probability of a debt crisis. The theoretically founded early warning signals …A healthy financial system encourages the efficient allocation of capital and risk. The collapse of the house price … stochastic optimal control (SOC)/dynamic risk management is a much more effective approach to determine the optimal degree of …