What makes a sovereign bond a safe asset is not the strength of its fundamentals in absolute terms but their strength relative to the alternatives, together with the size of the debt outstanding -- …
PublishedJournal of Money, Credit and BankingOnline 9 Sep 2024Published Aug 2026
This paper develops a two-country currency union DSGE model with endogenous TFP growth and product and labor market frictions to assess how cross-country differences in market regulation affect …