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GDP-indexed bonds: a solution to debt crises?
[Obligations indexées au PIB : une solution face aux crises de la dette ?]

Author

Listed:
  • Ludovic Gauvin
  • Jean-Baptiste Gossé
  • Florian Lalanne

Abstract

In countries with very high public debt, a major shock could prevent the implementation of countercyclical fiscal policies and increase default risk. GDP-indexed bonds would help to mitigate these risks and avoid a costly and disruptive restructuring. A counterfactual analysis of the Greek case illustrates this idea. Dans les pays où la dette publique est très élevée, un choc important pourrait empêcher de mener des politiques budgétaires contra-cycliques et accroître le risque de défaut. Des obligations indexées sur le PIB permettraient d’atténuer ces risques et d’éviter une restructuration coûteuse et déstabilisante. Une analyse contrefactuelle du cas grec illustre cette idée.

Suggested Citation

  • Ludovic Gauvin & Jean-Baptiste Gossé & Florian Lalanne, 2018. "GDP-indexed bonds: a solution to debt crises? [Obligations indexées au PIB : une solution face aux crises de la dette ?]," Eco Notepad 62, Banque de France.
    • Handle: RePEc:bfr:econot:62
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    File URL: https://www.banque-france.fr/fr/publications-et-statistiques/publications/obligations-indexees-au-pib-une-solution-face-aux-crises
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