https://www.esm.europa.eu/publications/us-corporate-tax-rate-cuts-spillovers-irish-economy Download PDF: Working Paper 38 This paper shows that past US corporate income tax rate cuts created small but persistent positive spillovers to the Irish economy. Author: Daragh Clancy (ESM) Abstract: We examine spillovers to the Irish economy from US corporate income tax rate cuts and find they...

https://www.esm.europa.eu/publications/esm-annual-report-2018 Go to the online: ESM Annual Report 2018 The annual report contains a description of the ESM's policies, activities, financial statements and economic developments in 2018. Additionally, it contains an external auditor's report and a report of the Board of Auditors.

https://www.esm.europa.eu/publications/costs-sovereign-defaults-restructuring-strategies-bank-distress-and-capital-inflow Download PDF: Working Paper 37 This paper shows how the output costs of sovereign defaults are intimately linked to the credit crunch and capital flight that such processes tend to generate. Authors: Tamon Asonuma (IMF), Marcos Chamon (IMF), Aitor Erce (ESM), Akira Sasahara (University of Idaho)...

https://www.esm.europa.eu/publications/does-public-debt-produce-crowding-out-effect-public-investment-eu Download PDF: Working Paper 36 This paper shows the detrimental effect of government debt on public investment in the EU Authors: Mattia Osvaldo Picarelli (European Stability Mechanism), Willem Vanlaer (Hasselt University), Wim Marneffe (Hasselt University) Abstract: This paper exploits a panel...

https://www.esm.europa.eu/publications/loss-aversion-economic-sentiments-and-international-consumption-smoothing Download PDF: Working Paper 35 This paper demonstrates that loss-averse behaviour weakens international consumption smoothing Authors: Daragh Clancy and Lorenzo Ricci (European Stability Mechanism) Abstract: We examine an unexplored connection between loss aversion and international consumption...

https://www.esm.europa.eu/publications/benevolence-time-sound-macroeconomic-environment-and-governance-quality-duration-0 Download PDF: Working Paper 34 This paper uses data on sovereign ratings for developed and emerging countries to understand the dynamics of investment-grade and speculative-grade phases. Authors: Luca Agnello (University of Palermo), Vitor Castro (Loughborough University) and Ricardo Sousa (European...

https://www.esm.europa.eu/publications/benefits-reducing-hold-out-risk-evidence-euro-cac-experiment-2013-2018 Download PDF: Working Paper 33 This paper studies the pricing implications of Collective Action Clauses in euro area sovereign bonds and finds that the yield effects are heterogeneous across economies and over time. Authors: Mattia Osvaldo Picarelli, Aitor Erce, Xu Jiang (all ESM) Abstract: The...

https://www.esm.europa.eu/publications/case-european-rainy-day-fund Download PDF: Discussion Paper 5 This paper draws on the US experience with state rainy day funds (RDFs) and develops a proposal to build a fiscal stabilisation function for the euro area in the format of a common non-mutualised European RDF. Authors: Andreja Lenarčič (European Stability Mechanism)...

https://www.esm.europa.eu/publications/cross-border-capital-flows-and-capital-markets-union-quo-vadis-europe Download PDF: Discussion Paper 3 This discussion paper gathers together the contributions made at a seminar on cross-border capital flows and capital markets union organised by and held at the ESM in December 2017. The contributions reflect the state of affairs at the time of the event. Authors...

https://www.esm.europa.eu/publications/sovereign-credit-ratings-under-fiscal-uncertainty Download PDF: Working Paper 32 This paper finds that fiscal uncertainty is an important determinant of sovereign credit ratings, and can explain why ratings often appear pro-cyclical during crisis periods. Author: Arno Hantzsche Abstract: This paper studies the response of credit rating agencies to...

https://www.esm.europa.eu/publications/imf%E2%80%93rfa-collaboration-motives-state-play-and-way-forward Download PDF: Discussion paper 4 This joint staff paper sheds light on the existing cooperation between the International Monetary Fund (IMF) and Regional Financing Arrangements (RFAs) and suggests further avenues to enhance their work together. It offers a collective RFA reply to the IMF’s recent...

https://www.esm.europa.eu/publications/risk-management-sovereign-financing-within-debt-sustainability-framework Download PDF: Working Paper 31 This paper presents a model for analysing debt sustainability by optimizing debt-financing decisions to balance borrowing costs with refinancing risks Authors: Marialena Athanasopoulou (ESM), Andrea Consiglio (University of Palermo), Aitor Erce (ESM), Angel Gavilan...

https://www.esm.europa.eu/publications/esm-annual-report-2017 Download PDF: ESM Annual Report 2017 The annual report contains a description of the ESM's policies, activities, financial statements and economic developments in 2017. Additionally, it contains an external auditor's report and a report of the Board of Auditors. Excerpt of the Message from the...

https://www.esm.europa.eu/publications/fiscal-multipliers-and-foreign-holdings-public-debt Download PDF: Working Paper 30 This paper finds that the effects of fiscal expansions on economic activity are stronger when governments have access to foreign sources of finance. Authors: Fernando Broner (CREI, Universitat Pompeu Fabra, and Barcelona GSE), Daragh Clancy (ESM), Alberto Martin (CREI...

https://www.esm.europa.eu/publications/pricing-and-hedging-gdp-linked-bonds-incomplete-markets Download PDF: Working Paper 29 This paper shows how to design, price, and hedge GDP-linked bonds and provides favourable evidence for their use, based on results for both advanced economies and emerging markets. Authors: Andrea Consiglio (University of Palermo) and Stavros A. Zenios (University of...

https://www.esm.europa.eu/publications/external-debt-composition-and-domestic-credit-cycles Download PDF: Working Paper 28 This paper finds that the composition of a country’s external debt provides valuable information about the likelihood of domestic credit booms and busts. Authors: Stefan Avdjiev (Bank for International Settlements), Stephan Binder (Bank for International Settlements)...

https://www.esm.europa.eu/publications/sovereign-ratings-analysis-degree-changes-and-source-moody%E2%80%99s-judgement Download PDF: Working Paper 27 This paper analyses Moody’s sovereign credit ratings and finds that the rating agency applies judgement to varying degrees across regions, income, rating levels and other factors Authors: Rudolf Alvise Lennkh and Edmund Moshammer (European Stability Mechanism) Abstract...

https://www.esm.europa.eu/publications/does-exchange-rate-depreciation-have-contractionary-effects-firm-level-investment Download PDF: Working Paper 26 Does exchange rate depreciation have contractionary effects on firm-level investment? The implications of alternative types of bond financing This paper shows that exchange rate depreciations can have a contractionary impact on investment spending when firms hold...

https://www.esm.europa.eu/investors/esm-and-efsf/esm-investor-relations-presentation The Investor Presentation gives an overview of topics that are relevant to investors evaluating ESM and/or EFSF instruments, such as:EFSF & ESM: Key features, structure and instrumentsEFSF & ESM: Lending and funding activitiesWhy invest in EFSF & ESM?EFSF & ESM recent transactions & performanceTo...

https://www.esm.europa.eu/publications/analysing-cross-currency-basis-spreads Download PDF: Working Paper 25 This paper studies the drivers behind the EUR/USD basis swap spreads widening Authors: Jaroslav Baran and Jiří Witzany Abstract: This paper investigates the drivers of cross-currency basis spreads, which were historically close to zero but have widened significantly...