scholarly journals Mispricing of Sovereign Risk and Multiple Equilibria in the Eurozone

2012 ◽  
Author(s):  
Paul De Grauwe ◽  
Yuemei Ji
Keyword(s):  
Multiple Equilibria ◽  
Sovereign Risk

Does the Banking Sector Affect Sovereign Risk

2009 ◽  
Author(s):  
Rahmi Erdem Aktug ◽  
Nandkumar Nayar ◽  
Geraldo M. Vasconcellos
Keyword(s):  
Banking Sector ◽  
Sovereign Risk

Sovereign Risk Premia

2011 ◽  
Author(s):  
Adrien Verdelhan ◽  
Nicola Borri
Keyword(s):  
Risk Premia ◽  
Sovereign Risk

The Political Economy of Italy's Decline

2018 ◽  
Author(s):  
Andrea Lorenzo Capussela
Keyword(s):  
Political Economy ◽  
Tax Evasion ◽  
Social Order ◽  
Economic History ◽  
Multiple Equilibria ◽  
Institutional Economics ◽  
Coordination Games ◽  
The Political ◽  
Political Accountability ◽  
Private Goods

This book offers an interpretation of Italy’s decline, which began two decades before the Great Recession. It argues that its deeper roots lie in the political economy of growth. This interpretation is illustrated through a discussion of Italy’s political and economic history since its unification, in 1861. The emphasis is placed on the country’s convergence to the productivity frontier and TFP performance, and on the evolution of its social order and institutions. The lens through which its history is reviewed, to illuminate the origins and evolution of the current constraints to growth, is drawn from institutional economics and Schumpeterian growth theory. It is exemplified by analysing two alternative reactions to the insufficient provision of public goods: an opportunistic one—employing tax evasion, corruption, or clientelism as means to appropriate private goods—and one based on enforcing political accountability. From the perspective of ordinary citizens and firms such social dilemmas can typically be modelled as coordination games, which have multiple equilibria. Self-interested rationality can thus lead to a spiral, in which several mutually reinforcing vicious circles lead society onto an inefficient equilibrium characterized by low political accountability and weak rule of law. The book follows the gradual setting in of this spiral, despite an ambitious attempt at institutional reform, in 1962–4, and its resumption after a severe endogenous shock, in 1992–4. It concludes that innovative ideas can overcome the constraints posed by that spiral, and ease the country’s shift onto a fairer and more efficient equilibrium.

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