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Recovering from bond market distress: Good luck and good policy

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  • Wälti, Sébastien
  • Weder, Ghislaine

Abstract

This paper focuses on the resolution of bond market crises. Episodes of bond market distress are identified using secondary market sovereign bond spreads. Duration models are used to assess the role of the global environment, domestic policy, IMF programs and political events in explaining the length of distress episodes. We find a rich set of interactions between favourable external conditions, sound macroeconomic policies and the presence of an IMF program which contribute to shorter bond market crises.

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Bibliographic Info

Article provided by Elsevier in its journal Emerging Markets Review.

Volume (Year): 10 (2009)
Issue (Month): 1 (March)
Pages: 36-50

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Handle: RePEc:eee:ememar:v:10:y:2009:i:1:p:36-50

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Web page: http://www.elsevier.com/locate/inca/620356

Related research

Keywords: Bond market Crisis Recovery Duration;

References

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  18. Diego Saravia & Ashoka Mody, 2003. "Catalyzing Capital Flows," IMF Working Papers 03/100, International Monetary Fund.
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Cited by:
  1. Rocha, Katia & Moreira, Ajax, 2010. "The role of domestic fundamentals on the economic vulnerability of emerging markets," Emerging Markets Review, Elsevier, vol. 11(2), pages 173-182, June.

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