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Sovereign Debt, the Blessing Aspects and the Implications for the Euro Area

Sovereign Debt, the Blessing Aspects and the Implications for the Euro Area
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Year:    2020

Author:    Chiesa, Gabriella

Vierteljahrshefte zur Wirtschaftsforschung, Vol. 89 (2020), Iss. 1 : pp. 9–30

Abstract

Summary: The Euro area has a unique monetary authority that governs money creation, but several individual-countries’ sovereign debts that differ in terms of safety. We analyse: i) the interactions between the financial and real sector in such an environment; ii) the role of government bonds as liquidity instruments; iii) whether and how the correlation structure of the sovereign-bonds’ market values affects the portfolio composition of liquidity instruments and prices, and the scope for a debt management policy at the Euro area level.

Journal Article Details

Publisher Name:    Global Science Press

Language:    English

DOI:    https://doi.org/10.3790/vjh.89.1.9

Vierteljahrshefte zur Wirtschaftsforschung, Vol. 89 (2020), Iss. 1 : pp. 9–30

Published online:    2020-01

AMS Subject Headings:    Duncker & Humblot, Duncker & Humblot

Copyright:    COPYRIGHT: © Global Science Press

Pages:    22

Keywords:    Safe assets liquidity sovereign debt management sovereign debt spreads

Author Details

Chiesa, Gabriella

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Section Title Page Action Price
Sovereign Debt 9
Gabriella Chiesa: 9
 Sovereign Debt, the Blessing Aspects and the Implications for the Euro Area 9
1 Introduction 10
Related Literature 13
2 The Model 14
Assets 14
Firms/Banks 15
2.1 Liquidity Demand and Investment Choice 16
3 Equilibrium: Aggregate Investment, Bond Prices and Spreads 9
4 Multiple Risky Assets and Debt Management Policies 9
4.1 Debt Management 9
5 Conclusions 9
APPENDIX A 10
References 10