Local Currency Bond Markets

21 Pages Posted: 14 Sep 2006

See all articles by Francis E. Warnock

Francis E. Warnock

University of Virginia - Darden Business School; National Bureau of Economic Research (NBER)

John D. Burger

Loyola University Maryland - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 2006

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.

Keywords: bond market development, emerging market debt, original sin

JEL Classification: F30, G11, G15, O16

Suggested Citation

Warnock, Francis E. and Burger, John D., Local Currency Bond Markets (March 2006). Available at SSRN: https://ssrn.com/abstract=930072 or http://dx.doi.org/10.2139/ssrn.930072

Francis E. Warnock (Contact Author)

University of Virginia - Darden Business School ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-6076 (Phone)

HOME PAGE: http://faculty.darden.virginia.edu/warnockf/index.htm

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138-5398

John D. Burger

Loyola University Maryland - Department of Economics ( email )

4501 N. Charles St
Baltimore, MD 21210
United States
410-617-5831 (Phone)
410-617-2118 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
210
Abstract Views
5,100
Rank
201,174
PlumX Metrics