Long Title:
Saving the euro: self-fulfilling crisis and the ‘Draghi put’
Teaser:
Like banks, indebted governments can be vulnerable to self-fulfilling financial crises. This column applies this insight to the Eurozone sovereign debt crisis, and explains why the ECB’s Outright Monetary Transactions policy reduced sovereign bond spreads in the Eurozone.
Partners:
In surveying eight centuries of financial folly, Reinhart and Rogoff (2009) observed that:
