Work-in-Progress: "Disentangling the Eurozone Crisis: Government Default and Bank Credit in a Business Cycle Model"


Kellogg Work-in-progress seminars are designed to generate in-depth discussion of new scholarly work. For the pre-circulated paper and to attend, register with

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.

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