Economics, Econometrics and Finance
4 years ago

Eurobonds Boost Financial Stability in Eurozone, Reducing Credit Rationing.

1 view
Financial Instability, the Sovereign-Bank Nexus and Eurobonds: a Post-Keynesian Stock Flow Consistent Model.
Colin Vuilletet

Paper Summary

The article discusses how eurobonds can help stabilize the financial system in the Eurozone by breaking the negative cycle between sovereign debt and bank lending. By using a model with two countries, the study shows that eurobonds can reduce credit rationing by banks and improve financial stability in the region.

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