Trust Us to Repay: Social Trust, Long-Term Interest Rates and Sovereign Credit Ratings

Arbeitspapier

This paper asks whether the sensitivity of market long-term interest rates and credit ratings is associated with cross-country differences in informal institutions, measured by social trust. We note a number of theoretical mechanisms that could imply that similar objective problems are more likely to be effectively dealt with in higher-trust societies. A set of panel estimates across middle and high-income countries reveal that interest rates and ratings are substantially more sensitive to inflation and growth problems in low-trust countries. This finding sheds light on the differential market reactions to economic problems in seemingly comparable countries.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IFN Working Paper ; No. 1039

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Relation of Economics to Social Values ; Asset Pricing; Trading Volume; Bond Interest Rates
• Thema: Trust ; Credit ratings ; Interest rates ; Economic reforms

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Bergh, Andreas ; Bjørnskov, Christian
• Ereignis: Veröffentlichung
• (wer): Research Institute of Industrial Economics (IFN)
• (wo): Stockholm
• (wann): 2014

Weitere Informationen

• Handle: http://hdl.handle.net/10419/109107
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ