Deadly Embrace: Sovereign and Financial Balance Sheets Doom Loops

Emmanuel Farhi and Jean Tirole

Working Paper from Harvard University OpenScholar

Abstract: The recent unravelling of the Eurozone's financial integration raised concerns about feedback loops between sovereign and banking insolvency. This paper provides a theory of the feedback loop that allows for both domestic bailouts of the banking system and sovereign debt forgiveness by international creditors or solidarity by other countries. Our theory has important implications for the re-nationalization of sovereign debt and the rationale for banking unions.

Date: 2016-01
New Economics Papers: this item is included in nep-cba and nep-opm
References: Add references at CitEc
Citations: View citations in EconPapers (77)

Downloads: (external link)
http://scholar.harvard.edu/farhi/node/164191

Related works:
Journal Article: Deadly Embrace: Sovereign and Financial Balance Sheets Doom Loops (2018)
Working Paper: Deadly embrace: sovereign and financial balance sheets doom loops (2018)
Working Paper: Deadly Embrace - Sovereign and Financial Balance Sheets Doom Loops (2017)
Working Paper: Deadly Embrace: Sovereign and Financial Balance Sheets Doom Loops (2016)
Working Paper: Deadly Embrace: Sovereign and Financial Balance Sheets Doom Loops (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qsh:wpaper:164191

Access Statistics for this paper

More papers in Working Paper from Harvard University OpenScholar Contact information at EDIRC.
Bibliographic data for series maintained by Richard Brandon ( this e-mail address is bad, please contact ).