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GDP-Indexed Bonds: Making It Happen

Author

Listed:
  • Stephany Griffith-Jones
  • Krishnan Sharma

Abstract

There has been increasing interest in exploring financial instruments that could limit the cyclical vulnerabilities of developing countries and reduce the likelihood of defaults and debt crises. GDP-indexed bonds fall into this category and may also generate a wider range of benefits for issuer countries, investors and the global financial system. The authors also examine the concerns and obstacles relating to the introduction of this instrument, suggesting that some may be exaggerated while others could be overcome. The paper calls for international public action to help develop markets for GDP-linked bonds and proposes a number of actions, some of which would require collaboration between Governments, multilateral development banks and the private sector.

Suggested Citation

  • Stephany Griffith-Jones & Krishnan Sharma, 2006. "GDP-Indexed Bonds: Making It Happen," Working Papers 21, United Nations, Department of Economics and Social Affairs.
    • Handle: RePEc:une:wpaper:21
    as

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    File URL: http://www.un.org/esa/desa/papers/2006/wp21_2006.pdf
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    References listed on IDEAS

    as
    1. John Williamson, 2005. "Curbing the Boom-Bust Cycle: Stabilizing Capital Flows to Emerging Markets," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa75, October.
    2. Eduardo Borensztein & Paolo Mauro, 2004. "The case for GDP-indexed bonds [‘World income components: measuring and exploiting risk-sharing opportunities’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 19(38), pages 166-216.
    3. Alexandra Tabova, 2005. "On the feasibility and desirability of GDP-indexed concessional lending," Department of Economics Working Papers 0509, Department of Economics, University of Trento, Italia.
    4. Morris Goldstein & Philip Turner, 2004. "Controlling Currency Mismatches in Emerging Markets," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 373, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    GDP-indexed bonds; cyclical vulnerabilities; issuers; investors; public good; international public action;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F30 - International Economics - - International Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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