## The Risk Premiumon Italian Government Debt, 1976-1988

_IMF Working Papers, April 1, 1990_

## Source details

**Canonical URL:** [The Risk Premiumon Italian Government Debt, 1976-1988](https://www.imf.org/en/publications/wp/issues/2016/12/30/the-risk-premiumon-italian-government-debt-1976-1988-3052)

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## Bibliographic details
- Authors: Carlo Cottarelli, Mauro Mecagni
- Published: April 1, 1990
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451977516.001

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### Summary and main findings
- The paper analyzes the behavior of the yield differential between government and nongovernment bonds in Italy between 1976 and 1988.
- The trend increase of the yield differential observed in this period was significantly influenced by the deterioration of public finances.
- Deterioration of public finances is reflected by:
  - an increase in the relative supply of government with respect to nongovernment paper, and
  - a worsening of selected default risk indicators.
- The effect of relative supply factors was found to be:
  - statistically more robust, and
  - quantitatively more important
  than the effect of risk indicators in explaining movements of the yield differential.

### Subjects and keywords
- Subjects: Banking; Bonds; Debt default; External debt; Financial institutions; National accounts; Public debt; Return on investment; Sovereign bonds
- Keywords: asset yield; Bonds; BTPs issue; Debt default; debt ratio; Return on investment; risk premium; SCI bond; Sovereign bonds; WP; yield differential

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/the-risk-premiumon-italian-government-debt-1976-1988-3052_