Government Debt Denomination Policies Before and After the EMU Advent

Government Debt Denomination Policies before and after the EMU Advent

Through a cost-minimizing approach, this paper derives four joint indicators to assess the ef…ciency of the mix of sovereign debt currencies between the countries belonging to the European Monetary Union (EMU). This theoretical insight enables us to explain why and how the introduction of the euro and the adoption of a common monetary policy may have led to signi…cant changes in debt structure ...

Inflation, default, and the denomination of sovereign debt

Emerging market countries increasingly issue nominal government debt. At the same time, these countries experience sovereign debt crises with default and high inflation. This paper studies the implications of debt denomination for sovereign default and inflation policies. Using bond-level data on government borrowing, I show that default and inflation rates vary systematically with debt denomin...

Government–Financial Market Relations after EMU New Currency, New Constraints?

The European Monetary Union (EMU) has generated a variety of changes, including the loss of national monetary policy autonomy and the creation of deeper integrated intraEuropean markets for goods, services, and financial instruments. This article explores the extent to which EMU has changed the ways in which and the extent to which international financial markets influence national policy choic...

Government Debt

This paper surveys the literature on the macroeconomic effects of government debt. It begins by discussing the data on debt and deficits, including the historical time series, measurement issues, and projections of future fiscal policy. The paper then presents the conventional theory of government debt, which emphasizes aggregate demand in the short run and crowding out in the long run. It next...

“Heterogeneity in the debt-growth nexus: Evidence from EMU