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European University Institute - Robert Schuman Centre for Advanced Studies

Shifts in expectations may undermine debt sustainability | Giancarlo Corsetti

Pierre Werner Chair Giancarlo Corsetti has recently co-authored an op-ed for the Centre for Economic Policy Research on the European Central Bank purchasing large quantities of government bonds and its impact on financial markets sustainability.

15 November 2022 | Opinion


This piece by Professor Giancarlo Corsetti and Lorenzo Codogno was published on 3 November 2022 and argues that over the past few years sustainability analysis was suspended and financial markets were under anaesthetic, but the fundamental drivers of debt sustainability have now returned.

"A shift in expectations to higher equilibrium interest rates and lower economic growth may push debt dynamics into a bad equilibrium".

Read the full piece.

Last update: 30 November 2022

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