Davide Tomio

Some economists urge countries to embrace government borrowing — but can too much debt prove a problem in a crisis? Yes, determines new research. The COVID-19 pandemic has had vastly different economic impact on governments that are fiscally constrained as opposed to those that are fiscally robust. Professor Tomio discusses the details of his study

Professor Tomio looks at how bond purchases by the European Central Bank created a large mispricing between the market for German and Italian government bonds and their respective futures contracts.