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Hello from the Other Side: Both Government Liabilities and Assets Matter for Sovereign Risk.
- Source :
- Journal of Money, Credit & Banking (John Wiley & Sons, Inc.); Sep2024, Vol. 56 Issue 6, p1595-1604, 10p
- Publication Year :
- 2024
-
Abstract
- We provide evidence that for advanced economies' sovereign bond markets in recent decades, both sides of the government balance sheet matter: for explaining government borrowing cost empirically, (i) government assets are significant in addition to government liabilities, and (ii) it is government net worth (total financial and non‐financial assets less liabilities) rather than government liabilities that matters when both are included. The central country‐specific fiscal factor driving sovereign bond yields thus appears to be government net worth. The focus of policy and academic debates though has tended to be narrowly on government debt, even as government net worth has declined substantially in many OECD countries in recent decades. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00222879
- Volume :
- 56
- Issue :
- 6
- Database :
- Complementary Index
- Journal :
- Journal of Money, Credit & Banking (John Wiley & Sons, Inc.)
- Publication Type :
- Academic Journal
- Accession number :
- 179254318
- Full Text :
- https://doi.org/10.1111/jmcb.13102