Yields for Some Euro Government Bonds Falling Fast

A move in the opposite direction would have made it to the headlines of all financial newspapers but, just in case you missed it, here are the yields on 10-year government bonds for Ireland and Spain. They are still high relative to where they were before the crisis but they have been falling very fast over the last weeks. Some of this fall has to do with lower interest rates everywhere else (so the spread with the German yields has not fallen as much as what you see in these figures), but from the perspective of sustainability of government debt what matters is the interest rate you pay on your bonds and not the differential with a safe asset.

Spain 10-Year Government Bonds

Ireland 10-Year Government Bonds

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About Antonio Fatás 136 Articles

Affiliation: INSEAD

Antonio Fatás is professor of Economics at INSEAD. He is a Research Fellow at the Centre for Economic and Policy Research in London and has worked as external consultant for international organizations such as the International Monetary Fund, the OECD and the World Bank.

He teaches the macroeconomics core course in the MBA program as well as different modules on the global macroeconomic environment in Executive Education. His research is focused on the study of business cycles, fiscal policy and the economics of European integration. His articles appear in academic journals such as the Quarterly Journal of Economics, Journal of Monetary Economics, Journal of Money, Credit and Banking, Journal of Public Economics, Journal of International Economics, Journal of Economic Growth, European Economic Review or Economic Policy.

Professor Fatás earned his M.A. and Ph.D. from Harvard University, and M.S. from Universidad de Valencia.


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