In this section we look at data concerning 10-year government bond yields. Although our main interest is the default risk, this presents only one channel through which fiscal policies can affect long-term yields. There are other channels operating through monetary-fiscal interaction, which should be reflected in the evolution of yields. Therefore we start our descriptive analysis in this section by looking at yields, forward rates and inflation expectations at a weekly frequency. Then we move to an analysis of interest rate swap spreads, at a weekly and daily frequency. For the EU countries represented in Figure 1, the yields dropped from an interval of in the beginning.
