Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/215325 
Erscheinungsjahr: 
2020
Schriftenreihe/Nr.: 
IZA Discussion Papers No. 12929
Verlag: 
Institute of Labor Economics (IZA), Bonn
Zusammenfassung: 
We study the effects on financial markets and real economic activity of changes in risk related to political events and policy announcements in Italy during the 2013-2019 period that saw the rise to power of populist parties. We focus on events that have implications for budgetary policy, debt sustainability and for Euro membership. We use changes in the Credit Default Swaps (CDS) spread on governments bonds around those dates as an instrument for shocks to policy and institutional risk – political risk for short – in the context of Local Projections - IV. We show that shocks associated with the rise of populist forces or their policies have adverse and sizable effects on financial markets. These negative effects were moderated by European institutions and domestic constitutional constraints. In addition, Italian political developments generate international spillover effects on the spreads of some other euro-zone countries. Finally, political risk shocks have a negative impact on the real economy, although the accommodating stance of monetary policy helped in cushioning their effect.
Schlagwörter: 
populism
political risk
policy uncertainty
sovereign debt
fiscal policy
CDS spread
JEL: 
E44
G10
H62
H63
Dokumentart: 
Working Paper

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