Debt-to-GDP measures in major OECD countries are at historical highs and a considerable part of sovereign debt needs to be refinanced soon,while projections of real GDP growth are fairly weak and uncertain and assesse...Debt-to-GDP measures in major OECD countries are at historical highs and a considerable part of sovereign debt needs to be refinanced soon,while projections of real GDP growth are fairly weak and uncertain and assessed sovereign credit quality has declined.Against this,the OECD Committee on Financial Markets discussed proposals for sovereign debt managers to consider issuing GDP-linked sovereign bonds.The Committee considered proposals timely and the idea conceptually attractive,as additional insurance against economic downturns over the medium term would be available.It identified however also a number of issues that would complicate issuance in practise.Questions arise in particular as regards investor demand for such instruments and how an additional novelty,liquidity and indexation premium would compare to a potentially reduced default premium on more traditional debt.Debt management offices confirm and stress such practical difficulties and remain sceptical,quoting a lack of sustainable demand for such bonds.As a result,issuance of such bonds would be too costly.It is not clear however whether debt management offices take into account the full macroeconomic and financial stability risk-return trade-off that a broader perspective would take into account.Proposals for issuance of sovereign GDP-linked bonds among advanced economies,which had received increased attention after the German G20-presidency included the topic in the G20 finance track,may have lost some momentum,but there continues to be considerable support from both academics and some practitioners.展开更多
The Greek debt crisis poses a major obstacle for the world economy to overcome before global markets can begin to rally. Greece’s GDP currently stands at 240 billion euros, but the financially weak
We consider a transaction costs model of sovereign debt buybacks in this paper. We show that both secret and publicly known buybacks are profitable for the debtor country. Furthermore, the government of the debtor cou...We consider a transaction costs model of sovereign debt buybacks in this paper. We show that both secret and publicly known buybacks are profitable for the debtor country. Furthermore, the government of the debtor country would like to spend all of its initial endowment to buy back its debt as soon as possible. When the initial endowment of the government is publicly known, the equilibrium outcome of the secret buyback model is the same as in the public buyback model. However, the equilibrium outcomes are different when the initial endowment is private information of the government. Under reasonable conditions, the secondary market price under publicly observable buybacks is lower than the price under secret buybacks. Therefore the government prefers the former over the latter when the initial endowment is not commonly known.展开更多
Through the comparison of the sovereign debt risks of the two economies,this paper focuses on the analyses of the risk formation path and the fiscal sustainability at the macroeconomic level.Due to the differences in ...Through the comparison of the sovereign debt risks of the two economies,this paper focuses on the analyses of the risk formation path and the fiscal sustainability at the macroeconomic level.Due to the differences in the external resources and coping measures that affect the risk formation of the two economies,as well as the differences in the institutional roots that lead to the rise of debt risks,the impact mechanism of sovereign debt risks is also different.Finally,theoretical and policy implications are given.展开更多
文摘Debt-to-GDP measures in major OECD countries are at historical highs and a considerable part of sovereign debt needs to be refinanced soon,while projections of real GDP growth are fairly weak and uncertain and assessed sovereign credit quality has declined.Against this,the OECD Committee on Financial Markets discussed proposals for sovereign debt managers to consider issuing GDP-linked sovereign bonds.The Committee considered proposals timely and the idea conceptually attractive,as additional insurance against economic downturns over the medium term would be available.It identified however also a number of issues that would complicate issuance in practise.Questions arise in particular as regards investor demand for such instruments and how an additional novelty,liquidity and indexation premium would compare to a potentially reduced default premium on more traditional debt.Debt management offices confirm and stress such practical difficulties and remain sceptical,quoting a lack of sustainable demand for such bonds.As a result,issuance of such bonds would be too costly.It is not clear however whether debt management offices take into account the full macroeconomic and financial stability risk-return trade-off that a broader perspective would take into account.Proposals for issuance of sovereign GDP-linked bonds among advanced economies,which had received increased attention after the German G20-presidency included the topic in the G20 finance track,may have lost some momentum,but there continues to be considerable support from both academics and some practitioners.
文摘The Greek debt crisis poses a major obstacle for the world economy to overcome before global markets can begin to rally. Greece’s GDP currently stands at 240 billion euros, but the financially weak
文摘We consider a transaction costs model of sovereign debt buybacks in this paper. We show that both secret and publicly known buybacks are profitable for the debtor country. Furthermore, the government of the debtor country would like to spend all of its initial endowment to buy back its debt as soon as possible. When the initial endowment of the government is publicly known, the equilibrium outcome of the secret buyback model is the same as in the public buyback model. However, the equilibrium outcomes are different when the initial endowment is private information of the government. Under reasonable conditions, the secondary market price under publicly observable buybacks is lower than the price under secret buybacks. Therefore the government prefers the former over the latter when the initial endowment is not commonly known.
文摘Through the comparison of the sovereign debt risks of the two economies,this paper focuses on the analyses of the risk formation path and the fiscal sustainability at the macroeconomic level.Due to the differences in the external resources and coping measures that affect the risk formation of the two economies,as well as the differences in the institutional roots that lead to the rise of debt risks,the impact mechanism of sovereign debt risks is also different.Finally,theoretical and policy implications are given.
