Learning about Debt Crises

摘要: The European debt crisis of 2008-2014 was marked with a surge in government bond yields on unprecedented scale among developed countries modern history. peak this occurred significant lag following the initial shocks to output, even though governments did not undertake fiscal adjustments necessary prevent further increase default risk. I show that these observations are at odds predictions existing sovereign models and propose new theory features disaster risk incomplete information about country’s economic outlook. In model calibrated Portuguese economy, delay arises endogenously as result markets’ learning process. support dataset real-time forecasts (private public) forecast errors were particularly large outset Great Recession, line predictions.