Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/39471
Authors: 
Evrensel, Ayşe Y.
Kutan, Ali M.
Year of Publication: 
2004
Series/Report no.: 
ZEI working paper B 09-2004
Abstract: 
This paper critically evaluates the existing empirical literature on creditor moral hazard in sovereign bond markets, proposes a unified theoretical approach to test for IMF-induced creditor moral hazard, and provides empirical evidence, using daily sovereign bond market spreads of Indonesia and Korea. The results suggest that IMF-related news regarding program negotiations and approval may be associated with creditor moral hazard, but their impact on spreads is short-lived, indicating that creditor moral hazard could be best described as a short-run phenomenon.
JEL: 
F32
F33
F34
Document Type: 
Working Paper

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