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PRODID:https://www.diw.de/de/diw_01.c.806339.de/veranstaltungen.html
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UID:diw_01.c.513523.en
LOCATION:Gustav-Schmoller-Raum,DIW Berlin im Quartier 110,3.3.002A,Anton-Wilhelm-Amo-Straße 58,10117 Berlin
SUMMARY:Does Austerity Pay Off?
DESCRIPTION:12:00 - 13:15 // We investigate whether a reduction of government consumption lowers the sovereign default premium. For this purpose we build a new data set for 38 emerging and developed economies. Results vary along three dimensions. First, the time horizon: the premium declines, but only in the long run. Second, initial conditions: the premium increases in the short run, but only if it is already high. Third, size: the short-run response of the premium increases disproportionately in the reduction of government consumption. We rationalize these findings in a model of optimal sovereign default where default risk is priced in an actuarially fair manner.
DTSTART;VALUE=DATE:20160120
DTEND;VALUE=DATE:20160120
DTSTAMP:20150907T220000Z
URL:https://www.diw.de/en/diw_01.c.513523.en/events/does_austerity_pay_off.html
ORGANIZER;CN=Hedwig Plamper
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