<div class="csl-bib-body">
<div class="csl-entry">Wolf, M., & Zessner-Spitzenberg, L. (2024, August 29). <i>Fear of Hiking? Rising Interest Rates in Times of High Public Debt</i> [Conference Presentation]. EEA-ESEM 2024, Rotterdam, Netherlands (the). http://hdl.handle.net/20.500.12708/202964</div>
</div>
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dc.identifier.uri
http://hdl.handle.net/20.500.12708/202964
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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
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dc.subject
sovereign dept
en
dc.subject
sovereign default
en
dc.subject
low interest rates
en
dc.subject
slow moving dept crisis
en
dc.subject
interest rate normalization
en
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
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dc.type.category
Conference Presentation
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tuw.researchTopic.id
A4
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tuw.researchTopic.id
C6
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tuw.researchTopic.name
Mathematical Methods in Economics
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tuw.researchTopic.name
Modeling and Simulation
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tuw.researchTopic.value
20
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tuw.researchTopic.value
80
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tuw.publication.orgunit
E105-03 - Forschungsbereich Ökonomie
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tuw.author.orcid
0009-0003-9699-2381
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tuw.author.orcid
0000-0002-8571-7515
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tuw.event.name
EEA-ESEM 2024
en
tuw.event.startdate
26-08-2024
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tuw.event.enddate
30-08-2024
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tuw.event.online
On Site
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tuw.event.type
Event for scientific audience
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tuw.event.place
Rotterdam
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tuw.event.country
NL
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tuw.event.institution
Erasmus School of Economics
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tuw.event.presenter
Zessner-Spitzenberg, Leopold
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wb.sciencebranch
Wirtschaftswissenschaften
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wb.sciencebranch.oefos
5020
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wb.sciencebranch.value
100
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item.languageiso639-1
en
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item.grantfulltext
none
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item.openairetype
conference paper not in proceedings
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item.openairecristype
http://purl.org/coar/resource_type/c_18cp
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item.cerifentitytype
Publications
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item.fulltext
no Fulltext
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crisitem.author.dept
University of St. Gallen, Switzerland
-
crisitem.author.dept
E105-03 - Forschungsbereich Ökonomie
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crisitem.author.orcid
0009-0003-9699-2381
-
crisitem.author.orcid
0000-0002-8571-7515
-
crisitem.author.parentorg
E105 - Institut für Stochastik und Wirtschaftsmathematik
