In 2007, countries in the Euro periphery were enjoying stable growth, low deficits, and low spreads. Then the financial crisis erupted and pushed them into deep recessions, raising their deficits and debt levels. By 2010, they were facing severe debt problems. Spreads increased and, surprisingly, so did the share of the debt held by domestic creditors. Credit was reallocated from the private to the public sectors, reducing investment and deepening the recessions even further. To account for these facts, we propose a simple model of sovereign risk in which debt can be traded in secondary markets. The model has two key ingredients: creditor discrimination and crowding-out effects. Creditor discrimination arises because, in turbulent times, sovereign debt offers a higher expected return to domestic creditors than to foreign ones. This provides incentives for domestic purchases of debt. Crowding-out effects arise because private borrowing is limited by financial frictions. This implies that domestic debt purchases displace productive investment. The model shows that these purchases reduce growth and welfare, and may lead to self-fulfilling crises. It also shows how crowding-out effects can be transmitted to other countries in the Eurozone, and how they may be addressed by policies at the European level.
A temporary move to Toronto in the winter of 2000, a twisted ankle, an empty house -- all inspired Moure as she read Alberto Caeiro/Fernando Pessoa's classic long poem O Guardador de Rebanhos. For fun, she started to translate, altering tones and vocabularies. From the Portuguese countryside and roaming sheep of 1914, a 21st century Toronto emerged, its neighbourhoods still echoing the 1950s, their dips and hollows, hordes of wild cats, paved creeks. Her poem became a translation, a transcreation, the jubilant and irrepressible vigil of a fervent person. "Suddenly," says Moure impishly, "I had found my master." Caeiro's sheep were his thoughts and his thoughts, he claimed, were all sensations. Moure's sheep are stray cats and from her place in Caeiro's poetry, she creates a woman alive in an urban world where the rural has not vanished, where the archaic suffuses us even when we do not beckon it, and yet the present tense floods us fully.
In 2007, countries in the Euro periphery were enjoying stable growth, low deficits, and low spreads. Then the financial crisis erupted and pushed them into deep recessions, raising their deficits and debt levels. By 2010, they were facing severe debt problems. Spreads increased and, surprisingly, so did the share of the debt held by domestic creditors. Credit was reallocated from the private to the public sectors, reducing investment and deepening the recessions even further. To account for these facts, we propose a simple model of sovereign risk in which debt can be traded in secondary markets. The model has two key ingredients: creditor discrimination and crowding-out effects. Creditor discrimination arises because, in turbulent times, sovereign debt offers a higher expected return to domestic creditors than to foreign ones. This provides incentives for domestic purchases of debt. Crowding-out effects arise because private borrowing is limited by financial frictions. This implies that domestic debt purchases displace productive investment. The model shows that these purchases reduce growth and welfare, and may lead to self-fulfilling crises. It also shows how crowding-out effects can be transmitted to other countries in the Eurozone, and how they may be addressed by policies at the European level.
The Washington Post Book World has written that Fernando Pessoa was "Portugal's greatest writer of the twentieth century [though] some critics would even leave off that last qualifying phrase" and "one of the most appealing European modernists, equal in command and range to his contemporaries Rilke and Mandelstam." The Selected Prose of Fernando Pessoa, a Los Angeles Times Best Book of 2001, spans playful philosophical inquiry, Platonic dialogue, and bitter intellectual scrapping between Pessoa and his many literary alter egos ("heteronyms"). The heteronyms launch movements and write manifestos, and one of them attempts to break up Pessoa's only known romantic relationship. Also included is a generous selection from Pessoa's masterpiece, The Book of Disquiet, freshly translated by Richard Zenith from newly discovered materials. The Selected Prose of Fernando Pessoa is an important record of a crucial part of the literary canon.
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