A Kellogg Work-in-Progress Seminar with Visiting Fellow Maximilian Goedl.
Goedl builds a model of the euro based on countries featuring government default risk as well as financial shocks. The model is used to disentangle the structural determinants of output growth, bank lending, government debt, interest spreads, and other macroeconomic variables during the eurozone crisis. Moreover, the model permits an analysis of the quantitative effects of fiscal and macro-prudential policies, such as bank equity injections or fiscal consolidation plans.
Originally published at conductorshare.nd.edu.