IDEAS home Printed from https://ideas.repec.org/a/taf/revpoe/v33y2021i4p769-792.html
   My bibliography  Save this article

Timing Does Matter: Institutional Flaws and the European Debt Crisis

Author

Listed:
  • Valerio Filoso
  • Carlo Panico
  • Erasmo Papagni
  • Francesco Purificato
  • Marta Vázquez Suárez

Abstract

Financial crises are complex phenomena. Yet, at the cost of some simplifications, the literature has identified two main elements causing the crises: macroeconomic imbalances and institutional design flaws. Economists recognise that both play some role, but disagree on their strength. Using Bai and Perron’s technique and an EGARCH model we contribute to the debate on the European debt crisis by identifying break dates and changes in volatility in daily values of 10-year public bond interest rates for Greece, Italy and Spain. The results are then related to key political and institutional events. The results of our econometric exercise uncover the following facts: the crisis began in May 2010; worsened after summer 2011, as the European authorities hastened to restructure the Greek debt; improved during summer 2012, when the ECB approved the OMTs, a new programme for the purchase of bonds. On the whole, the results are compatible with an interpretation of the crisis that considers the institutional flaws as the main cause.

Suggested Citation

  • Valerio Filoso & Carlo Panico & Erasmo Papagni & Francesco Purificato & Marta Vázquez Suárez, 2021. "Timing Does Matter: Institutional Flaws and the European Debt Crisis," Review of Political Economy, Taylor & Francis Journals, vol. 33(4), pages 769-792, October.
    • Handle: RePEc:taf:revpoe:v:33:y:2021:i:4:p:769-792
    DOI: 10.1080/09538259.2020.1859717
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09538259.2020.1859717
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09538259.2020.1859717?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Keita, Kady & Rabaud, Isabelle & Turcu, Camelia, 2023. "Fiscal outcomes, current account imbalances, and institutions in Europe: Exploring nonlinearities," International Economics, Elsevier, vol. 175(C), pages 121-134.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:revpoe:v:33:y:2021:i:4:p:769-792. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CRPE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.