Eurobonds: a quantitative approach

Angelo Stefano Baglioni, Umberto Cherubini

Risultato della ricerca: Contributo in rivistaArticolo in rivista

4 Citazioni (Scopus)

Abstract

The structural model of sovereign credit risk introduced in an earlier paper by the authors is applied here to measure the impact of introducing Eurobonds. Tranching (i. e. splitting the public debt into a senior and a junior tranche) is coupled with a cross-guarantee among eurozone countries and with a cash transfer. We show that Eurobonds can reduce the overall cost of servicing the public debt for some (high debt) countries in the euro area without increasing the cost for other countries. Moreover, they are likely to give governments an incentive to curb their deficits, due to the higher marginal cost of debt.
Lingua originaleEnglish
pagine (da-a)507-521
Numero di pagine15
RivistaREVIEW OF LAW & ECONOMICS
Volume2016
DOI
Stato di pubblicazionePubblicato - 2016

Keywords

  • eurobond

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