The EMU sovereign-debt crisis: Fundamentals, expectations and contagion

We offer a detailed empirical investigation of the European sovereign debt crisis based on the theoretical model by Arghyrou and Tsoukalas (2010). We find evidence of a marked shift in market pricing behaviour from a ‘convergence-trade’ model before August 2007 to one driven by macro-fundamentals and international risk thereafter. The majority of EMU countries have experienced contagion from Greece. There is no evidence of significant speculation effects originating from CDS markets. Finally, the escalation of the Greek debt crisis since November 2009 is confirmed as the result of an unfavourable shift in countryspecific market expectations. Our findings highlight the necessity of structural, competitiveness-inducing reforms in periphery EMU countries and institutional reforms at the EMU level enhancing intra-EMU economic monitoring and policy co-ordination.euro-area, crisis, spreads, fundamentals, expectations, contagion, speculation.

Determinants of Sovereign Bond Yield Spreads in the EMU. An Optimal Currency Area Perspective

In the light of the recent financial crisis, we take a panel cointegration approach that allows for structural breaks to the analysis of the determinants of sovereign bond yield spreads in nine economies of the European Monetary Union. While we find evidence for a level break in the cointegrating relationship, we do not find empirical support for a regime shift and hence for a change in the pricing of the determinants of sovereign spreads. Moreover, results show that (i) fiscal imbalances (namely expected government debt-to-GDP differentials) are the main long-run drivers of sovereign spreads; (ii) liquidity risks and cumulated inflation differentials have non-negligible weights; but (iii) all conclusions are ultimately connected to whether or not the sample of countries is composed of members of an Optimal Currency Area (OCA). In particular, we establish (i) that results are overall driven by those countries not passing the OCA test; and (ii) that investors closely monitor and severely punish the deterioration of expected debt positions of those economies exhibiting significant gaps in competitiveness

Sovereign spreads and financial market behavior before and during the crisis

JEL: C23, E43, E62, F34, G01, G12, H60This paper aims at shedding some light on the mechanisms of pricing the EMU countries’ sovereign bonds in financial markets. Employing the Augmented Mean Group (AMG) estimator, we find that major changes have occurred in terms of variables underlying sovereign risk. Since 2009, macroeconomic and fiscal fundamentals has started to play a more important role, but only those that capture domestic demand evolution. In contrast, price competitiveness seems less important. The second conclusion lies in reversed attitude towards banking sector imbalances, as compares to earlier period. One of the problems addressed concerns the horizon of projected macroeconomic and fiscal variables taken into account. The paper presents some evidence that financial markets have become more myopic and started to rely on short-term forecasts, whilst they had tended to encompass longer-term forecast horizon before the crisis

Catholic Higher Education and Latino(a) Students: Exploring the Experience of University Undergraduates

The experience of Latino(a) undergraduates at Notre Dame was the focus of this study. In general, the students had a positive experience at the university, but one that included challenges, including physical separation from family and familiar community. Family and spiritual supports were important to the Latino(a) students as they coped with difficulties they encountered at the university, than for a comparable sample of Anglo students attending Notre Dame

A aquisição de competências de liderança no ensino secundário e a sua transferibilidade para o ensino superior: o caso da região Alto Trás-os-Montes, Portugal

Este estudo de investigação tem três objectivos fundamentais. 1) Analisar as competências adquiridas no percurso do Ensino Secundário por uma amostra constituída por alunos que frequentavam o 1º ano do nível de Ensino Superior; 2) Avaliar a transferibilidade de competências do Ensino Secundário para o Ensino Superior; 3) Determinar as diferenças existentes entre géneros e classes etárias em oito domínios de competências: a) Auto-gestão; b) Relações interpessoais; c) Resolução de problemas/tomada de decisões; d) Desenvolvimento cognitivo/análise crítica; e) Organização e planeamento; f) auto-confiança; g) Sensibilidade para a diversidade; e, i) Tecnologia. Participaram neste estudo de investigação 439 alunos (do 1º ano) e 18 alunos (do 2º ano) tendo os participantes revelado ter adquirido, durante o Ensino Secundário, níveis acima do moderado nas oito áreas de competência analisadas. Foram encontradas diferenças estaticamente significativas entre os géneros no domínio de competência “diversidade”. Entrevistas realizadas a 18 alunos a frequentarem o 2º ano do Ensino Superior na mesma instituição indicaram que grande parte das competências adquiridas no Ensino Secundário são fulcrais para um bom desempenho no inicio do percurso Universitário, ocorrendo o princípio da transferibilidade harmoniosa de competências entre níveis de ensino. This research study has three fundamental objectives. 1) Analyse the abilities acquired by students who now attend Higher education; 2) Evaluate the transferability of abilities from the Secondary Education to Higher Education; 3) Determine the existing differences between gender and age classes in eight different abilities: ) Self management; b) Interpersonal relationships; c) Conflict resolution/decision making; d) Cognitive development/analysis; e) Organization and planning; f) Self-confidence; g) Sensitivity to diversity; and, i) Technology. The participants in this study were 439 pupils (1st year) and 18 (2nd year) and revealed having acquired, during Secondary Education, levels above of the moderate in the eight analyzed areas of ability. Statistic significant differences between gender and age had been found in the ability domain of "diversity". Semi structured interviews conducted with eighteen pupils attending the 2º year of Higher Education had indicated that great part of the abilities acquired in Secondary Education is determinant for a good performance in the beginning of the University experience, occurring the principle of the harmonious transferability of abilities between education levels

On the time-varying relationship between EMU sovereign spreads and their determinants

We use a dynamic multipath general-to-specific algorithm to capture structural instability in the link between euro area sovereign bond yield spreads against Germany and their underlying determinants over the period January 1999 – August 2011. We offer new evidence suggesting a significant heterogeneity across countries, both in terms of the risk factors determining spreads over time as well as in terms of the magnitude of their impact on spreads. Our findings suggest that the relationship between euro area sovereign risk and the underlying fundamentals is strongly time-varying, turning from inactive to active since the onset of the global financial crisis and further intensifying during the sovereign debt crisis. As a general rule, the set of financial and macro spreads’ determinants in the euro area is rather unstable but generally becomes richer and stronger in significance as the crisis evolves

Lost in Translation

The ramifications of Proposition 227, legislation that threatened to eliminate bilingual education passed by California in 1998, sparked a nationwide debate about the validity of education that non-English speaking students were receiving in a bilingual classroom versus that of an English-only classroom. While there was a deluge of arguments regarding the efficiency of English comprehension in the two classroom environments, what many commentators on the issue overlooked was the difference in the retention of the students’ identities

The determinants of sovereign bond yield spreads in the EMU

We use a panel of euro area countries to assess the determinants of long-term sovereign bond yield spreads over the period 1999.01-2010.12. We find that, unlike the period preceding the global financial crisis, European government bond yield spreads are wellexplained by macro- and fiscal fundamentals over the crisis period. We also find that the menu of macro and fiscal risks priced by markets has been significantly enriched since March 2009, including the risk of the crisis’ transmission among EMU member states, international risk and liquidity risk. Finally, we find that sovereign credit ratings are statistically significant in explaining spreads, yet compared to macro- and fiscal fundamentals their role is limited

Determinants of the Portuguese government bond yield spread

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Finance from the NOVA – School of Business and EconomicsThis paper seeks to find out the determinants of the 10 year Portuguese government bond yield spread for the period between the January of 2010 and December of 2012. Fundamental factors (debt ratio and government balance in % of GDP) and contagion effects are the main drivers behind the surge of the yield spread during the first two years of the sample. Liquidity risk (measured by the bid-ask spread) and the size of the banking system are also significant determinants. These same factors however, have no significance in explaining the drop in the yield spread during the final seven months of the sample