The Political Determinants of Government Bond Holdings

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IWH Discussion Papers ; No. 14/2016

Classification and Topics

• Classification: Wirtschaft ; Portfolio Choice; Investment Decisions ; International Financial Markets ; General Financial Markets: Government Policy and Regulation ; Structure, Scope, and Performance of Government ; National Debt; Debt Management; Sovereign Debt
• Subject: government bond portfolio ; political factors ; Treasury International Capital data ; PPML

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Eichler, Stefan ; Plaga, Timo
• Event: Veröffentlichung
• (who): Leibniz-Institut für Wirtschaftsforschung Halle (IWH)
• (where): Halle (Saale)
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/137588
• URN: urn:nbn:de:gbv:3:2-54619
• Last update: 10.03.2025, 11:43 AM CET