Publicação
Fiscal rules and government financing costs
| Resumo: | This paper assesses the effect of fiscal rules on sovereign bond spreads over the short and medium term, for 34 advanced countries and 19 emerging market economies, over the period 1980–2016. Our results, based on impulse response functions, show that the dynamic impact of fiscal rules on sovereign yield spreads is negative and statistically significant, at around 1.2–1.8 percentage points, implying lower government borrowing costs. This result stems essentially from the advanced economies subsample. We also find that more fiscally responsible countries are the ones for which a fiscal rule reduces the government’s borrowing costs. Moreover, in times of recession, a fiscal rule leads financial markets to reduce the risk premiums on government bonds. Finally,when it comes to design features of fiscal rules, independent monitoring of compliance to the rule, done outside government, also reduces sovereign spreads. |
|---|---|
| Autores principais: | Afonso, António |
| Outros Autores: | Jalles, João Tovar |
| Assunto: | Fiscal Rules Sovereign Spreads Financing Costs Impulse Response Functions Local Projection Generalised Method of Moments (GMM) |
| Ano: | 2019 |
| País: | Portugal |
| Tipo de documento: | artigo |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório da Universidade de Lisboa |
| _version_ | 1866809632028098560 |
|---|---|
| author | Afonso, António |
| author2 | Jalles, João Tovar |
| author2_role | author |
| author_facet | Afonso, António Jalles, João Tovar |
| author_role | author |
| contributor_name_str_mv | Repositório Científico de Acesso Aberto da ULisboa |
| country_str | PT |
| creators_json_txt | [{\"Person.name\":\"Afonso, António\"},{\"Person.name\":\"Jalles, João Tovar\"}] |
| datacite.contributors.contributor.contributorName.fl_str_mv | Repositório Científico de Acesso Aberto da ULisboa |
| datacite.creators.creator.creatorName.fl_str_mv | Afonso, António Jalles, João Tovar |
| datacite.date.Accepted.fl_str_mv | 2019-01-01T00:00:00Z |
| datacite.date.available.fl_str_mv | 2022-09-15T09:48:43Z |
| datacite.date.embargoed.fl_str_mv | 2022-09-15T09:48:43Z |
| datacite.rights.fl_str_mv | http://purl.org/coar/access_right/c_abf2 |
| datacite.subjects.subject.fl_str_mv | Fiscal Rules Sovereign Spreads Financing Costs Impulse Response Functions Local Projection Generalised Method of Moments (GMM) |
| datacite.titles.title.fl_str_mv | Fiscal rules and government financing costs |
| dc.contributor.none.fl_str_mv | Repositório Científico de Acesso Aberto da ULisboa |
| dc.creator.none.fl_str_mv | Afonso, António Jalles, João Tovar |
| dc.date.Accepted.fl_str_mv | 2019-01-01T00:00:00Z |
| dc.date.available.fl_str_mv | 2022-09-15T09:48:43Z |
| dc.date.embargoed.fl_str_mv | 2022-09-15T09:48:43Z |
| dc.format.none.fl_str_mv | application/pdf |
| dc.identifier.none.fl_str_mv | http://hdl.handle.net/10400.5/25504 |
| dc.language.none.fl_str_mv | eng |
| dc.publisher.none.fl_str_mv | John Wiley & Sons Ltd. |
| dc.rights.none.fl_str_mv | http://purl.org/coar/access_right/c_abf2 |
| dc.subject.none.fl_str_mv | Fiscal Rules Sovereign Spreads Financing Costs Impulse Response Functions Local Projection Generalised Method of Moments (GMM) |
| dc.title.fl_str_mv | Fiscal rules and government financing costs |
| dc.type.none.fl_str_mv | http://purl.org/coar/resource_type/c_6501 |
| description | This paper assesses the effect of fiscal rules on sovereign bond spreads over the short and medium term, for 34 advanced countries and 19 emerging market economies, over the period 1980–2016. Our results, based on impulse response functions, show that the dynamic impact of fiscal rules on sovereign yield spreads is negative and statistically significant, at around 1.2–1.8 percentage points, implying lower government borrowing costs. This result stems essentially from the advanced economies subsample. We also find that more fiscally responsible countries are the ones for which a fiscal rule reduces the government’s borrowing costs. Moreover, in times of recession, a fiscal rule leads financial markets to reduce the risk premiums on government bonds. Finally,when it comes to design features of fiscal rules, independent monitoring of compliance to the rule, done outside government, also reduces sovereign spreads. |
| dirty | 0 |
| eu_rights_str_mv | openAccess |
| format | article |
| fulltext.url.fl_str_mv | https://repositorio.ulisboa.pt/bitstreams/0c50d14f-b6d8-46f2-b94d-07737f541a99/download |
| id | ul_e5dc5edd6d45937cbc2fddcd4d047446 |
| identifier.url.fl_str_mv | http://hdl.handle.net/10400.5/25504 |
| instacron_str | ul |
| institution | Universidade de Lisboa |
| instname_str | Universidade de Lisboa |
| language | eng |
| network_acronym_str | ul |
| network_name_str | Repositório da Universidade de Lisboa |
| oai_identifier_str | oai:repositorio.ulisboa.pt:10400.5/25504 |
| organization_str_mv | urn:organizationAcronym:ul |
| person_str_mv | Afonso, António Jalles, João Tovar |
| publishDate | 2019 |
| publisher.none.fl_str_mv | John Wiley & Sons Ltd. |
| reponame_str | Repositório da Universidade de Lisboa |
| repository_id_str | urn:repositoryAcronym:ul |
| service_str_mv | urn:repositoryAcronym:ul |
| spelling | engJohn Wiley & Sons Ltd.pt_PTThis paper assesses the effect of fiscal rules on sovereign bond spreads over the short and medium term, for 34 advanced countries and 19 emerging market economies, over the period 1980–2016. Our results, based on impulse response functions, show that the dynamic impact of fiscal rules on sovereign yield spreads is negative and statistically significant, at around 1.2–1.8 percentage points, implying lower government borrowing costs. This result stems essentially from the advanced economies subsample. We also find that more fiscally responsible countries are the ones for which a fiscal rule reduces the government’s borrowing costs. Moreover, in times of recession, a fiscal rule leads financial markets to reduce the risk premiums on government bonds. Finally,when it comes to design features of fiscal rules, independent monitoring of compliance to the rule, done outside government, also reduces sovereign spreads.application/pdfpt_PTFiscal rules and government financing costsAfonso, AntónioJalles, João TovarHostingInstitutionOrganizationalRepositório Científico de Acesso Aberto da ULisboae-mailmailto:repositorio@reitoria.ulisboa.ptrepositorio@reitoria.ulisboa.pt2022-09-15T09:48:43Z20192019-01-01T00:00:00ZHandlehttp://hdl.handle.net/10400.5/25504http://purl.org/coar/access_right/c_abf2open accessFiscal RulesSovereign SpreadsFinancing CostsImpulse Response FunctionsLocal ProjectionGeneralised Method of Moments (GMM)997506 bytesliteraturehttp://purl.org/coar/resource_type/c_6501journal articlehttp://purl.org/coar/access_right/c_abf2application/pdffulltexthttps://repositorio.ulisboa.pt/bitstreams/0c50d14f-b6d8-46f2-b94d-07737f541a99/download |
| spellingShingle | Fiscal rules and government financing costs Afonso, António Fiscal Rules Sovereign Spreads Financing Costs Impulse Response Functions Local Projection Generalised Method of Moments (GMM) |
| status | SINGLETON |
| subject.fl_str_mv | Fiscal Rules Sovereign Spreads Financing Costs Impulse Response Functions Local Projection Generalised Method of Moments (GMM) |
| title | Fiscal rules and government financing costs |
| title_full | Fiscal rules and government financing costs |
| title_fullStr | Fiscal rules and government financing costs |
| title_full_unstemmed | Fiscal rules and government financing costs |
| title_short | Fiscal rules and government financing costs |
| title_sort | Fiscal rules and government financing costs |
| topic | Fiscal Rules Sovereign Spreads Financing Costs Impulse Response Functions Local Projection Generalised Method of Moments (GMM) |
| topic_facet | Fiscal Rules Sovereign Spreads Financing Costs Impulse Response Functions Local Projection Generalised Method of Moments (GMM) |
| url | http://hdl.handle.net/10400.5/25504 |
| visible | 1 |