Kiel Working Papers, Kiel Institute for World Economics
No 1780:
Die Zinslast des Bundes in der Schuldenkrise: Wie lukrativ ist der „sichere Hafen“?
Jens Boysen-Hogrefe
Abstract: In the aftermath of the Great Recession and during the
debt crisis in the euro area yields on German federal bonds have been
exceptionally low. This analysis tries to calculate the profits that the
federal government makes due to the low yields. The interest payments that
are due to emissions of bonds and bills made between 2009 and 2012 are
approximated and compared to several benchmark scenarios. Compared to the
mean yields of the years 1999-2008 profits of the federal government are
quite high (68 billion euros). Application of yield curve models show that
most of these profits are due to the macroeconomic conditions in the euro
area and to low central bank rates. To a much smaller extend these profits
are due to flight into safety, which, however, has become more relevant
recently
Keywords: safe haven, interest payments, debt crisis, yield curve; (follow links to similar papers)
JEL-Codes: G12,; H63; (follow links to similar papers)
16 pages, July 2012
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