Local Currency Bond Markets
John Burger and
Francis Warnock
No 12552, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
We analyze the development of 49 local bond markets. Our main finding is that policies and laws matter: Countries with stable inflation rates and strong creditor rights have more developed local bond markets and rely less on foreign-currency-denominated bonds. The results suggest that "original sin" is a misnomer. Emerging economies are not inherently dependent upon foreign-currency debt. Rather, by improving policy performance and strengthening institutions they may develop local currency bond markets, reduce their currency mismatch, and lessen the likelihood of future crises.
JEL-codes: F30 G15 O16 (search for similar items in EconPapers)
Date: 2006-10
New Economics Papers: this item is included in nep-fin, nep-fmk and nep-mon
Note: IFM
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Citations: View citations in EconPapers (141)
Published as Burger, John D., and Francis E. Warnock, 2006. "Local Currency Bond Markets," IMF Staff Papers 53 (Special Issue): 115-132.
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