The impact of fiscal rules on sovereign risk premia: International evidence

John Thornton and Chrysovalantis Vasilakis

Finance Research Letters, 2017, vol. 20, issue C, 63-67

Abstract: We examine whether adopting a numerical fiscal rule framework to guide fiscal policy helps reduce sovereign risk premia in a sample of advanced and developing countries for 1985–2012. We address the self-selection problem of policy adoption by applying propensity score matching methods. The results suggest that adopting fiscal rules reduces sovereign risk premia.

Keywords: Sovereign risk; Fiscal rules; Propensity score matching (search for similar items in EconPapers)
JEL-codes: E43 G12 H60 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:20:y:2017:i:c:p:63-67

DOI: 10.1016/j.frl.2016.09.008

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