Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/137588
Authors: 
Eichler, Stefan
Plaga, Timo
Year of Publication: 
2016
Series/Report no.: 
IWH Discussion Papers 14/2016
Abstract: 
This paper analyzes the link between political factors and sovereign bond holdings of US investors in 60 countries over the 2003-2013 period. We find that, in general, US investors hold more bonds in countries with few political constraints on the government. Moreover, US investors respond to increased uncertainty around major elections by reducing government bond holdings. These effects are particularly significant in democratic regimes and countries with sound institutions, which enable effective implementation of fiscal consolidation measures or economic reforms.
Subjects: 
government bond portfolio
political factors
Treasury International Capital data
PPML
JEL: 
G11
G15
G18
H11
H63
Document Type: 
Working Paper

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