<div class="csl-bib-body">
<div class="csl-entry">Wolf, M., & Zessner-Spitzenberg, L. (2024, May 3). <i>Fear of Hiking? Rising Interest Rates in Times of High Public Debt</i> [Conference Presentation]. Theories and Methods in Macro (T2M), Amsterdam, Netherlands (the). http://hdl.handle.net/20.500.12708/202631</div>
</div>
-
dc.identifier.uri
http://hdl.handle.net/20.500.12708/202631
-
dc.description.abstract
We build a sovereign default model to understand the implications of rising safe interest rates for countries with high public debt. When debt levels are below a critical threshold, countries respond to higher interest rates by reducing their debt due to a dominant substitution effect. For high debt levels, in contrast, the same rate rise triggers even more debt - and possibly a slow moving debt spiral - due to a dominant income effect. The seeds for a debt spiral are laid by a long phase of low interest rates: they imply that debt levels rise over time, making a future interest rate normalization more difficult. A successful interest rate normalization involves a credible path of rising interest rates, the speed of which must be intermediary: a too fast normalization leads to debt spirals, but a too slow one undermines incentives by the government to repay.
en
dc.language.iso
en
-
dc.subject
sovereign dept
en
dc.subject
sovereign default
en
dc.subject
low interest rates
en
dc.subject
slow moving dept crisis
-
dc.subject
interest rate normalization
-
dc.title
Fear of Hiking? Rising Interest Rates in Times of High Public Debt
en
dc.type
Presentation
en
dc.type
Vortrag
de
dc.contributor.affiliation
University of St. Gallen, Switzerland
-
dc.type.category
Conference Presentation
-
tuw.researchTopic.id
A4
-
tuw.researchTopic.id
C6
-
tuw.researchTopic.name
Mathematical Methods in Economics
-
tuw.researchTopic.name
Modeling and Simulation
-
tuw.researchTopic.value
20
-
tuw.researchTopic.value
80
-
tuw.publication.orgunit
E105-03 - Forschungsbereich Ökonomie
-
tuw.event.name
Theories and Methods in Macro (T2M)
en
tuw.event.startdate
02-05-2024
-
tuw.event.enddate
03-05-2024
-
tuw.event.online
On Site
-
tuw.event.type
Event for scientific audience
-
tuw.event.place
Amsterdam
-
tuw.event.country
NL
-
tuw.event.institution
University of Amsterdam
-
tuw.event.presenter
Zessner-Spitzenberg, Leopold
-
wb.sciencebranch
Wirtschaftswissenschaften
-
wb.sciencebranch.oefos
5020
-
wb.sciencebranch.value
100
-
item.grantfulltext
none
-
item.openairecristype
http://purl.org/coar/resource_type/c_18cp
-
item.openairetype
conference paper not in proceedings
-
item.languageiso639-1
en
-
item.cerifentitytype
Publications
-
item.fulltext
no Fulltext
-
crisitem.author.dept
University of St. Gallen
-
crisitem.author.dept
E105-03 - Forschungsbereich Ökonomie
-
crisitem.author.orcid
0000-0002-8571-7515
-
crisitem.author.parentorg
E105 - Institut für Stochastik und Wirtschaftsmathematik
