Sovereign Debt Crisis in Portugal and in Spain

Afonso, António; Verdial, Nuno

doi:10.2139/ssrn.3504337

Cited by 2 publications

References 22 publications

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Default risk and fiscal sustainability in PIIGS countries

Kazakova,

Petrov

2023

Journal of Economics and International Relations

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During the entire period of existence and expansion of the European Union, the integration of the economies of the new countries of the union was strengthened. Thus, in the 1990s, the term "PIIGS countries" was born, which became the most widespread after the financial crisis in the EU in 2008, and which was often used in relation to the southern European countries of the EU (Portugal, Ireland, Italy, Greece and Spain), which were the most affected from growing debt and economic vulnerability. There have always been less developed states and more problematic countries in the economic environment, which today fall under the classification of peripheral countries of the European Union. The subject of research in the article is the default risk and fiscal stability of the PIIGS countries. The goal is to identify existing default risks and existing violations of fiscal stability in the PIIGS countries. The objective is to research the dynamics of the development of the economies of the PIIGS countries in the conditions of modern crises and challenges. General scientific methods are used, such as system analysis - to determine the peculiarities of the development of the economies of the PIIGS countries, the method of comparative analysis, thanks to which the peculiarities of the economies of the PIIGS countries, the peculiarities of their debt and fiscal policies are analyzed. Also, comparative analysis is used to study the difference between the PIIGS countries in terms of their default risk and fiscal sustainability. The following results were obtained: based on the analysis of the debt and fiscal stability of the PIIGS countries, problematic aspects were identified and the components of the economies of these countries were determined, as well as the factors influencing the risk of default and the quality of the fiscal stability of the PIIGS countries were calculated. Conclusions: The article identifies default risks for each of the PIIGS countries and their level of fiscal sustainability. Various methods of solving economic problems for the PIIGS countries have been studied and proposed, which will help these countries avoid default and improve their fiscal sustainability. Each of the PIIGS countries was studied separately. This made it possible to draw acceptable conclusions about each country.

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Default risk and fiscal sustainability in PIIGS countries

Kazakova,

Petrov

2023

Journal of Economics and International Relations

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Estimating the contribution of macroeconomic factors to sovereign bond spreads in the euro area

Burriel,

Delgado-Téllez,

Figueroa

et al. 2024

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This paper proposes a novel approach to estimating the contribution of macroeconomic factors to sovereign spreads in the euro area, defined as the spread level consistent with the country’s prevailing macroeconomic conditions. Despite the wealth of papers estimating sovereign spreads, model-dependency and lack of robustness remain key considerations. Accordingly, we propose a “thick modeling” empirical framework, based on the estimation of a wide range of models. We focus on 10-year sovereign bond yields for nine euro area countries, using a sample that covers the period January 2000 to December 2023. Our results show that observed spreads behave in line with macro-financial determinants in “normal” times. Macroeconomic determinants are also able to account for a significant fraction of the observed sovereign spread dynamics in most episodes of financial turbulence, such as the pandemic and the aftermath of the Russian invasion of Ukraine. However, we find evidence of some deviations of sovereign spreads from their estimated values during the 2010-2012 euro area sovereign debt crisis. In this period, macroeconomic indicators are able to explain at most 26% of the observed peaks in spreads among non-core countries.

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Sovereign Debt Crisis in Portugal and in Spain

Cited by 2 publications

References 22 publications

Default risk and fiscal sustainability in PIIGS countries

Default risk and fiscal sustainability in PIIGS countries

Estimating the contribution of macroeconomic factors to sovereign bond spreads in the euro area

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