Inflation Targeting and Country Risk : An Empirical Investigation /

The sovereign debt crisis in Europe has highlighted the role of country risk premia as a link between countries' fiscal and external balances, financial conditions and monetary policy. The purpose of this paper is to estimate how adoption of inflation targeting (IT) affects spreads. It is hypot...

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Bibliografski detalji
Glavni autor: Fouejieu, Armand
Daljnji autori: Roger, Scott
Format: Žurnal
Jezik:English
Izdano: Washington, D.C. : International Monetary Fund, 2013.
Serija:IMF Working Papers; Working Paper ; No. 2013/021
Online pristup:Full text available on IMF
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520 3 |a The sovereign debt crisis in Europe has highlighted the role of country risk premia as a link between countries' fiscal and external balances, financial conditions and monetary policy. The purpose of this paper is to estimate how adoption of inflation targeting (IT) affects spreads. It is hypothesized that country risk premia for IT countries (especially among emerging market economies) may be lower than for other countries owing to greater policy predictability and more stable long-term inflation. The findings suggest that IT reduces the risk premium, both through adoption of the IT regime, and through the observed track record in stabilizing inflation. 
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700 1 |a Roger, Scott. 
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