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Safe haven or contagion? The disparate effects of Euro-zone crises on non-Euro-zone neighbours

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  • Graham Bird
  • Wenti Du
  • Eric Pentecost
  • Thomas Willett

Abstract

While there have been many studies that examine contagion within the Euro-zone, this article investigates the potential contagion from changes in the Greek sovereign risk premium over 2009–2016, as measured by the yield on 10-year government bonds, to six European countries outside of the Euro-zone all of which operated a managed float against the Euro. We find evidence of contagion to potential Euro-zone ascendants (Czech Republic, Hungary and Poland), but ‘flight to safety’ (or safe haven) effects for the United Kingdom, Sweden and Switzerland.

Suggested Citation

  • Graham Bird & Wenti Du & Eric Pentecost & Thomas Willett, 2017. "Safe haven or contagion? The disparate effects of Euro-zone crises on non-Euro-zone neighbours," Applied Economics, Taylor & Francis Journals, vol. 49(59), pages 5895-5904, December.
    • Handle: RePEc:taf:applec:v:49:y:2017:i:59:p:5895-5904
    DOI: 10.1080/00036846.2017.1358445
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