Shifts in expectations may undermine debt sustainability
Corsetti, G. & Codogno, L.
(3 November 2022)
Shifts in expectations may undermine debt sustainability.
VoxEU.
Over the past few years, the ECB purchased large quantities of government bonds, and interest rates were below zero. This column argues that sustainability analysis was therefore de facto suspended and financial markets were under anaesthetic, but the fundamental drivers of debt sustainability have now returned. A shift in expectations to higher equilibrium interest rates and lower economic growth may push debt dynamics into a bad equilibrium
| Item Type | Blog post |
|---|---|
| Copyright holders | © 2022 The Author(s) |
| Departments | LSE > Academic Departments > European Institute |
| Date Deposited | 15 Jul 2024 |
| URI | https://researchonline.lse.ac.uk/id/eprint/124249 |