Government bonds in domestic and foreign currency: the role of macroeconomic and institutional factors

Stijn Claessens (), Daniela M. H. Klingebiel and Sergio Schmukler

No 2986, Policy Research Working Paper Series from The World Bank

Abstract: The development of government bond markets and, in particular, their currency composition have recently received much interest, partly because of their relation with financial crises. The authors study the determinants of the size and currency composition of government bond markets for a panel of industrial and developing countries. They find that countries with larger economies, greater domestic investor bases, and more flexible exchange rate regimes have larger domestic currency bond markets, while smaller economies rely more on foreign currency bonds. Better institutional frameworks and macroeconomic fundamentals enhance both domestic currency bond markets and increase countries'ability to issue foreign currency bonds, while they raise the share of foreign exchange bonds.

Keywords: Banks&Banking Reform; Public Sector Economics; International Terrorism&Counterterrorism; Macroeconomic Management; Payment Systems&Infrastructure; Economic Theory&Research; Environmental Economics&Policies (search for similar items in EconPapers)
Date: 2003-03-31
New Economics Papers: this item is included in nep-ifn
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Citations: View citations in EconPapers (48)

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Working Paper: Government Bonds in Domestic and Foreign Currency: The Role of Macroeconomic and Institutional Factors (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:2986

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