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Trust in Public Institutions over the Business Cycle

Stevenson, Betsey; Wolfers, Justin - National Bureau of Economic Research (NBER) - 2011

We document that trust in public institutions--and particularly trust in banks, business and government--has declined over recent years. U.S. time series evidence suggests that this partly reflects the pro-cyclical nature of trust in institutions. Cross-country comparisons reveal a clear legacy...

Persistent link: https://www.econbiz.de/10008868169

Was This Time Different? Fiscal Policy in Commodity Republics

Cespedes, Luis Felipe; Velasco, Andrés - National Bureau of Economic Research (NBER) - 2013

We revisit the issue of fiscal procyclicality in commodity-rich nations -commodity republics in the nomenclature of this paper. Since commodity prices are plausibly a main driver of fiscal policy outcomes in these countries, we focus on the behavior of fiscal variables across the commodity...

Persistent link: https://www.econbiz.de/10010969315

Government Debt and Banking Fragility: The Spreading of Strategic Uncertainty

Cooper, Russell; Nikolov, Kalin - National Bureau of Economic Research (NBER) - 2013

This paper studies the interaction of government debt and financial markets. Both markets are fragile: excessively responsive to fundamentals and prone to strategic uncertainty. This interaction, termed a ʽdiabolic loopʼ, is driven by government willingness to bail out banks and the resulting...

Persistent link: https://www.econbiz.de/10010969354

Sovereign Default Risk and Banks in a Monetary Union

Uhlig, Harald - National Bureau of Economic Research (NBER) - 2013

This paper seeks to understand the interplay between banks, bank regulation, sovereign default risk and central bank guarantees in a monetary union. I assume that banks can use sovereign bonds for repurchase agreements with a common central bank, and that their sovereign partially backs up any...

Persistent link: https://www.econbiz.de/10010951167

Distributional Incentives in an Equilibrium Model of Domestic Sovereign Default

Mendoza, Enrique G.; D'Erasmo, Pablo - National Bureau of Economic Research (NBER) - 2013

The European debt crisis shares features of the historical episodes of outright default on domestic public debt …

Persistent link: https://www.econbiz.de/10010969420

Sovereign Debt in Latin America, 1820-1913

Taylor, Alan M.; Paolera, Gerardo della - National Bureau of Economic Research (NBER) - 2012

This paper examines sovereign lending to Latin America and the Caribbean from 1820 to 1913. We examine four waves of capital flows where defaults were followed by a return to market access. In spite of extended default, countries kept promising high returns that attracted international investors...

Persistent link: https://www.econbiz.de/10010969421

Credit Ratings and the Pricing of Sovereign Debt during the Euro Crisis

Aizenman, Joshua; Hutchison, Michael Mercier; Binici, Mahir - National Bureau of Economic Research (NBER) - 2013

spreads shifted markedly between the pre-crisis and crisis periods. European countries had quite similar CDS responses to … credit rating changes during the pre-crisis period, but that large differences emerged during the crisis period between the …

Persistent link: https://www.econbiz.de/10010950758

Why Has Japan's Massive Government Debt Not Wreaked Havoc (Yet)?

Horioka, Charles Yuji; Hagiwara, Akiko Terada-; Nomoto, … - National Bureau of Economic Research (NBER) - 2013

to foreign investors in search of a safe haven for their funds in the face of the Global Financial Crisis of 2008 …-09 precipitated by the Lehman crisis. Our analysis suggests that the surge in foreign holdings of Japanese government securities will … saving and a temporary inflow of foreign capital caused by the Global Financial Crisis, but it may have substantial costs in …

Persistent link: https://www.econbiz.de/10010951434

Fiscal Policy and Macroeconomic Uncertainty in Developing Countries: The Tale of the Tormented Insurer

Mendoza, Enrique G.; Oviedo, P. Marcelo - National Bureau of Economic Research (NBER) - 2006

Governments in emerging markets often behave like a "tormented insurer," trying to use non-state-contingent debt instruments to avoid cuts in payments to private agents despite large fluctuations in public revenues. In the data, average public debt-GDP ratios decline as the variability of...

Persistent link: https://www.econbiz.de/10005774994

Towards a Political-Economic Theory of Domestic Debt

Drazen, Allan - National Bureau of Economic Research (NBER) - 1997

A political-economic model of the composition of government debt, that is, whether it is issued to domestic or foreign holders, is presented. The key determinant will be the political constraints on repudiation of foreign and domestic debt, which will determine the nature of the domestic...

Persistent link: https://www.econbiz.de/10005830456