Credit market discipline: Theory and evidence

Kula, Maria Cornachione

doi:10.1007/bf02295577

Cited by 6 publications

(6 citation statements)

References 12 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Bulut (2012) confirms the disciplining effect of credit markets on governments of developing countries. Kula (2004) on the other side finds no reaction of public borrowers. The MDH is rejected in regard to US federal states between 1973 and 1998.…”

Section: Effinterest Interest10ybdmentioning

confidence: 97%

Public debt and borrowing: Are governments disciplined by financial markets?

Afflatet

2016

Cogent Economics & Finance

View full text Add to dashboard Cite

Abstract:With the announcement to intervene on financial markets to restore the monetary transmission mechanism, the ECB has attenuated the pressure of the markets on the endangered peripheral countries of the Eurozone. Critics argue that by eliminating the markets' disciplining interest mechanism, governments in the crisis countries will not carry out reforms and consolidate their budgets. This kind of interplay between public deficit policy and financial markets is commonly discussed under the notion of Market Discipline Hypothesis. The hypothesis' second half suggests that governments react to rising interest rates by adjusting their deficit policy. Based on panel data for the European Union, different models are tested to investigate if governments react to rising interest rates. The results indicate that governments do raise their primary surpluses when they perceive the rising interest rates in their budgets. Governments react quite quickly to changing interest rates, although there seems to be some backlash in the medium-run.

show abstract

Section: Effinterest Interest10ybdmentioning

confidence: 97%

Public debt and borrowing: Are governments disciplined by financial markets?

Afflatet

2016

Cogent Economics & Finance

View full text Add to dashboard Cite

show abstract

“…More substantial peasants, who could afford ploughs and plough animals, used these to cultivate the arable land of the demesne, whereas smallholders did whatever work that required simpler tools or their bare hands, such as ditching and harvest work. 12 For Sweden, Torbrand's analysis of the work organization at the estate of Johannishus in around 1730 demonstrates a similar division of labour between landed peasants (bönder), who did most of the fieldwork, and crofters (torpare), who mainly performed various kinds of services for the estate, such as handicraft, building, and forest work. At peak seasons and during large construction projects, temporarily employed labourers supplemented the workforce.…”

Section: A Swedish Exception?mentioning

confidence: 99%

Labouring Poor in Early Modern Sweden?

Lindström¹

2018

Scandinavian Journal of History

View full text Add to dashboard Cite

We know very little about the unlanded population (obesuttna) in Sweden before 1750. Still, knowledge of this group is vital not only to our understanding of the proletarianization process, but also to the understanding of rural Sweden before the changes of the 18th and 19th centuries. This article takes a step towards filling this gap. Tax registers and church records from 17th-century Västmanland shows substantial proportions of unlanded people, i.e. crofters, cottagers, soldiers, artisans, and lodgers, around 1640 and 1690. The age structure of this group, which can be studied for the latter part of the period, shows that it mostly consisted of people in working age. In conclusion, the article argues that there was a significant group of smallholders and wage labourers in 17th-century Sweden, comparable to the labouring poor of other European countries.

show abstract

“…The Chubb relative value study data is used in research (Kula, 2004) which considers the yield data in comparison to states' net debt levels [7], finding that over the 1984-1998 period, states with the least stringent balanced budget rules had higher Chubb yields and higher net debt per capita than those with the most stringent rules [8].…”

Section: Consumption Smoothersmentioning

confidence: 99%

Are US state and local governments consumption smoothers?

Kula

2014

Journal of Economic Studies

View full text Add to dashboard Cite

Purpose – This paper aims to reconcile conflicting findings in the literature regarding the extent of consumption smoothing of sub-federal governments. Design/methodology/approach – This paper uses a panel of US state and local government data from 1973 to 2000 to find the extent of consumption smoothing among US state and local governments. Findings – It is found that about 30 percent of spending is determined by permanent resources. Additionally, states with more stringent balanced budget rules are found to smooth more than states with the least stringent balanced budget rules, which do not smooth at all. There is some evidence that liquidity constraints may cause the non-optimal behavior of the states with the least restrictive requirements as they have higher average net debt per capita and face higher risk premia than those with the most stringent rules. Research limitations/implications – Results differ from research using aggregate US data, where it is found that essentially all changes in state and local government spending are due to changes in current resources. The conflict is attributed to panel vs aggregate data use. Other research finds greater smoothing in Norway, where about 65 percent of local government spending is determined by permanent resources, and Sweden, with at least 90 percent of spending changes due to changes in permanent resources. This conflict may be due to institutional differences. Further research is needed in this area. Originality/value – This paper fills a gap in the literature on consumption smoothing by considering a panel of US state and local governments.

show abstract

Credit market discipline: Theory and evidence

Abstract: Abstract

Cited by 6 publications

References 12 publications

Public debt and borrowing: Are governments disciplined by financial markets?

Public debt and borrowing: Are governments disciplined by financial markets?

Labouring Poor in Early Modern Sweden?

Are US state and local governments consumption smoothers?

Contact Info

Product

Resources

About