This paper studies external sovereign bonds as an asset class. We compile a new database of 266,000 monthly prices of foreign-currency government bonds traded in London and New York between 1815 (the Battle of Waterloo) and 2016, covering up to 91 countries. Our main insight is that, as in equity markets, the returns on external sovereign bonds have been sufficiently high to compensate for risk. Real ...
Erstmals werden ökonomische Folgen von Heinrich Brünings Austeritätspolitik zwischen 1930 und 1932 quantifiziert – Sparmaßnahmen verursachten einen Einbruch des Bruttoinlandsprodukts von zusätzlich 4,5 Prozent und zusätzliche 3,3 Millionen Arbeitslose – Forderungen nach Austerität als Reaktion auf gestiegene Schuldenstände in Europa sollten vor diesem ...
We estimate the dynamic effects of government spending shocks, using time-varying volatility in US data modeled through a Markov switching process. We find that the average government spending multiplier is significantly and persistently above one, driven by a crowding-in of private consumption and non-residential investment. We rationalize the results empirically through a contemporaneously countercyclical ...
We investigate how internal distribution motives can interfere with the economic objectives of capital controls. In order to do this, we provide a model showing that elite capture can affect optimal debt repatriations and the management of official reserves under capital controls. Relying on these theoretical insights and a wealth of quantitative and qualitative historical evidence, we study one of ...