Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/222042 
Year of Publication: 
2018
Series/Report no.: 
IEHAS Discussion Papers No. MT-DP - 2018/29
Publisher: 
Hungarian Academy of Sciences, Institute of Economics, Budapest
Abstract: 
The paper reexamines the empirical relationship between external indebtedness and the interest premium on government bonds. We use a broad sample of countries between 1980-2017 that includes advanced, emerging and less-developed economies. We show that the relationship is strongly state-dependent, and it varies both with the international financial climate, and with the level of development. Moreover, while we find some evidence for non-linearity, this is mostly driven by turbulent periods. We carry out a number of robustness exercises, which highlight issues related to sample composition, the choice of the debt measure, and the definition of crisis events.
Subjects: 
interest premium
net foreign assets
estimation
country panel
state dependence
JEL: 
F34
F41
E43
E44
Document Type: 
Working Paper

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