Debt Sustainability in the Case of External Debt. An Analysis Based on Italy's Treasury Auctions.

37 Pages Posted: 4 Nov 2014

See all articles by Gianluca Cafiso

Gianluca Cafiso

University of Catania - Department of Economics and Business

Date Written: October 22, 2014

Abstract

The objective of this paper is to assess whether external debt makes a difference for public debt stabilization, where external debt is considered through the non-residents’ holdings according to a Balance of Payments perspective. The analysis is empirical and considers the case of Italy, one of the world’s largest debt issuer. We study the potential effects on the interest rate resulting from the auctions of government bonds to account for the effective cost borne by the Treasury. Our results point towards the irrelevance of the composition of the investor base for debt stabilization.

Keywords: debt stabilization, external debt, primary market, yields, Italy

JEL Classification: E630, F340, G110, H630

Suggested Citation

Cafiso, Gianluca, Debt Sustainability in the Case of External Debt. An Analysis Based on Italy's Treasury Auctions. (October 22, 2014). CESifo Working Paper Series No. 5021, Available at SSRN: https://ssrn.com/abstract=2518398 or http://dx.doi.org/10.2139/ssrn.2518398

Gianluca Cafiso (Contact Author)

University of Catania - Department of Economics and Business ( email )

Corso Italia 55
Catania, 95129
Italy
+39 095 7537 745 (Phone)

HOME PAGE: http://sites.google.com/site/giancafiso/

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