Objective
Research objectives and content
The purpose of the research is to investigate the possibility of defaulting on public debt. The issue is particularly relevant for those countries which have to deal with a very large public debt and, at the same time, are aiming to join EMU. I intend to analyse how the picture changes when one moves from a situation in which both inflation and default are available instruments of debt reduction to a situation in which inflation is no longer available.
To this end, I will take a 'political economy' approach in which an optimising policymaker has to finance a stochastic flow of public spending. The introduction of such a source of uncertainty in the government budget constraint allows me to determine default probability endogenously. A calibration exercise of the theoretical model, involving European countries, is also planned.
Finally the theoretical work will be supported by investigation of the nature of the risk premia incorporated in government bonds. The aim is to study the empirical relationship between risk premia and fiscal variables. Financial swap data will be used to measure the size of default risk on government bonds
Training content (objective, benefit and expected impact)
The opportunity of a PhD programme at the University of Warwick is a valuable experience of research work, giving me training dealing with theoretical and empirical issues and using advanced research techniques. I consider this experience a key step in acquiring the skills required for a future research career.
Links with industry / industrial relevance (22)
The research is of great relevance for the banking industry, in particular when financial institutions hold a significant amount of government debt in their portfolios.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
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Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Topic(s)
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
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Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Coordinator
CV4 7AL Coventry
United Kingdom
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.