.@voxeu @cepr_org: 'Sovereign GDP-Linked Bonds: Rationale & Design' (@RobertJShiller #Yale, Maurice Obstfeld #IMF, James Benford @BoE_Research Ed.) 'Despite the recent improvement in global growth, concerns linger of a #SecularStagnation in medium-term...https://t.co/LXsZMhCLTH— Satyen Baindur (@Satyen_Baindur) March 29, 2018
...prospects and of limited policy space to deal with the next economic downturn...#AE debt exceeds annual output and is at its highest since WWII; #EM debt is rising rapidly...#GDP-linked bonds can increase the #DebtLimit @ which #SovereignDefault occurs, 4 both #AEs & #EMs... pic.twitter.com/3g51DU3n6k— Satyen Baindur (@Satyen_Baindur) March 29, 2018
...for #AEs, the #DebtLimit increases till all debt is #GDP-linked, but 4 #EMs, the marginal effect on #DebtLimt begins to decline after ~60% debt is #GDP-linked...some caveats apply: #MoralHazard #RiskAppetite etc & the analysis may need 2 b modified 4 cntrys in a #CurrencyUnion— Satyen Baindur (@Satyen_Baindur) March 29, 2018
