The Eurozone's present state of crisis originated from decisions made at its creation. The
decision to create a monetary union was motivated by political objectives and completely …

The origin and propagation of the European sovereign debt crisis can be attributed to the
flawed original design of the euro. In particular, there was an incomplete understanding of …

We test the hypothesis that the government bond markets in the Eurozone are more fragile
and more susceptible to self-fulfilling liquidity crises than in stand-alone countries. We find …

We study slow moving debt crises: self-fulfilling equilibria in which high interest rates, due to
the fear of a future default, lead to a gradual but faster accumulation of debt, ultimately …

This article presents evidence that a significant part of the surge in the spreads of the PIIGS
(Portugal, Ireland, Italy, Greece and Spain) countries in the eurozone during 2010–11 was …

We study the conditions under which unconventional (balance sheet) monetary policy can
rule out self-fulfilling sovereign default in a model with optimizing but discretionary fiscal and …

This paper finds evidence that a significant part of the surge in the spreads of the PIGS
countries (Portugal, Ireland, Greece and Spain) in the eurozone during 2010-11 was …

This article studies the interaction of government debt and financial markets. This interaction,
termed a “diabolic loop,” is driven by government choice to bail out banks and the resulting …

Abstract Paul De Grauwe's Eurozone fragility hypothesis states that sovereign debt markets
in a monetary union without a lender-of-last-resort are vulnerable to self-fulfilling dynamics …

For a while, the storm seemed to have passed and the Eurozone entered a welcome tranquil
period. 1 Now, Greece has once again triggered the alarm and, while the financial and …