An Empirical Study On Sovereign Debt Maturity Structure In Eurozone

This paper makes an empirical study on member counties in Eurozone for the correlation between long-term sovereign debt percentage in total debt and macroeconomic index, the main finding shows that, current financing ability based on tax income of GDP radio and debt of GDP ratio has significant negative correlation to long-term debt, every country within Eurozone embodies in different features because of asymmetric shock effect. This paper also builds a governmental debt utility function model in order to indicate that sovereign debt maturity structure arrangement could be intertemporal smoothing by macro-regulatory in preventing debt crisis.By building a second phase of the government debt utility function model, this paper demonstrates how to achieve the optimal maturity structure of sovereign debt arrangements. The model shows that long-term debt ratio should be negatively correlated with the financing capacity and possitively correlated with current inflation rate. Government should give full consideration to the state's or the region's economic structure's endogenous demand when arranging the debt maturity structure, in order to prevent debt crises and maintain the stability of economic.This article is divided into the following five chapters:Chapter 1 describes the background,research methods and basic conclusions; Chapter 2 lists literature review, mainly about the sovereign debt crisis, the euro area financial integration process and the sovereign debt arrangements; Chapter 3 describes the eurozone government bond market in the financial integration; Chapter 3 describes the eurozone government bond market in the financial integration. This chapter elaborates the formation of the unified euro-zone sovereign debt market and the convergence of yields and term structure after the integration of Europe sovereign debt market; Chapter 4 is an empirical test about euro area term structure of sovereign debt, and Chapter 5 makes the conclusion.