Sunday, August 12, 2012

Bond Yields in Emerging Economies- IMF Paper



This paper finds that the extent to which fiscal variables affect domestic bond yields in emerging economies depends on the level of global risk aversion. During tranquil times in global markets, fiscal variables do  not seem to be a significant determinant of domestic bond yields in emerging economies.  However, when market participants are on edge, they pay greater attention to country specific fiscal fundamentals, revealing greater alertness about default risk.


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