Government Bonds in Domestic and Foreign Currency: the Role of Institutional and Macroeconomic Factors
AbstractIn contrast to some recent research, this paper finds that institutional and macroeconomic factors are related to the depth and currency composition of government bond markets. Using panel data for developed and emerging economies, we find several factors to be systematically associated with bond markets. Aside from economic size (already shown to affect the currency composition), this paper shows that investor bases matter. Economies with deeper domestic financial systems (measured by bank deposits and stock market capitalization) have larger domestic currency bond markets and issue less foreign currency debt, whereas foreign investor demand is positively related to the size and share of foreign currency bonds. Moreover, less flexible exchange rate regimes are associated with more foreign currency issuance. Other relevant variables include inflation, fiscal burden, legal origin, and capital account openness. Copyright � 2007 The Authors; Journal compilation � 2007 Blackwell Publishing Ltd.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of International Economics.
Volume (Year): 15 (2007)
Issue (Month): 2 (05)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Essers, Dennis & Cassimon, Danny, 2012. "Washing away original sin: vulnerability to crisis and the role of local currency bonds in Sub-Saharan Africa," IOB Working Papers, Universiteit Antwerpen, Institute of Development Policy and Management (IOB) 2012.12, Universiteit Antwerpen, Institute of Development Policy and Management (IOB).
- Kannan Thuraisamy & Gerry Gannon & Jonathan A. Batten, 2007. "Credit Spread Dynamics: Evidence from Latin America," Accounting, Finance, Financial Planning and Insurance Series, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance 2007_13, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
- Melecky, Martin, 2010.
"Choosing the Currency Structure of Foreign-currency Debt: a Review of Policy Approaches,"
21268, University Library of Munich, Germany.
- Martin Melecky, 2012. "Choosing The Currency Structure Of Foreign‐Currency Debt: A Review Of Policy Approaches," Journal of International Development, John Wiley & Sons, Ltd., vol. 24(2), pages 133-151, 03.
- Serkan Arslanalp & Tigran Poghosyan, 2014. "Foreign Investor Flows and Sovereign Bond Yields in Advanced Economies," IMF Working Papers 14/27, International Monetary Fund.
- Veronica Cacdac Warnock & Francis E. Warnock, 2008. "Markets and Housing Finance," Working Papers, Hong Kong Institute for Monetary Research 032008, Hong Kong Institute for Monetary Research.
- Esteban Vesperoni & Walter Orellana R., 2008. "Dollarization and Maturity Structure of Public Securities," IMF Working Papers 08/157, International Monetary Fund.
- Ken Miyajima & Madhusudan Mohanty & Tracy Chan, 2012. "Emerging market local currency bonds: diversification and stability," BIS Working Papers 391, Bank for International Settlements.
- Axel Lindner & Alexander Ludwig, 2009. "A simple macro model of Original Sin based on optimal price setting under incomplete information," International Economics and Economic Policy, Springer, Springer, vol. 6(4), pages 345-359, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.