Public-Debt Financing in the case of External Debt
Gianluca Cafiso
Working Papers from CEPII research center
Abstract:
The objective of this paper is to assess whether non-residents’ holdings of a country’s debt make a difference for debt stabilization, where non-residents’ holdings are considered external debt 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 detect two possible channels through which external debt might alter the conditions for debt stabilization. Among these, we focus on the Interest Rate Determination in the primary market of Government Bonds. Our results point out the irrelevance of the investors base for debt stabilization.
Keywords: External Debt; Auction Redemption Yield; Debt Stabilization; Vector Auto Regression; Regime Switch (search for similar items in EconPapers)
JEL-codes: E63 F34 G11 H63 (search for similar items in EconPapers)
Date: 2013-11
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2013-37
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