Everand Logo

Welcome to Everand!

  • Discover millions of ebooks, audiobooks, and so much more with a free trial

    Only $11.99/month after trial. Cancel anytime.

    Unavailable
    Reviving the Case for GDP-Indexed Bonds
    Unavailable
    Reviving the Case for GDP-Indexed Bonds
    Unavailable
    Reviving the Case for GDP-Indexed Bonds
    Ebook38 pages25 minutes

    Reviving the Case for GDP-Indexed Bonds

    By Eduardo Borensztein

    ()

    Currently unavailable

    Currently unavailable

    About this ebook

    This paper seeks to revive the case for countries to self-insure against economic growth slowdowns by issuing GDP-indexed bonds. We simulate the effects of GDP-indexed bonds under different assumptions about fiscal policy reaction functions and their output effects and find that they could substantially reduce the likelihood that debt/GDP paths become explosive. The insurance premium would likely be small, because cross-country comovement of GDP growth rates is low and cross-country GDP growth risk is thus largely diversifiable for an investor holding a portfolio of GDP-indexed bonds. Potential obstacles to the emergence of a market for these bonds include the verifiability of GDP data, the trade-off between insurance and moral hazard, and the need for liquidity. The paper discusses institutional fixes and suggests an approach to attempting to start up a market.

    LanguageEnglish
    PublisherINTERNATIONAL MONETARY FUND
    Release dateSep 1, 2002
    ISBN9781455294183
    Unavailable
    Reviving the Case for GDP-Indexed Bonds

    Related to Reviving the Case for GDP-Indexed Bonds

    Related ebooks

    Public Policy For You

    View More
    View More

    Related podcast episodes

    Related articles

    • Article

      Government Bonds Under Fire

      Oct 14, 2023

      Government Bonds Under Fire
      4 min read

    • Article

      Government Bonds - Under Fire

      Oct 14, 2023

      Government Bonds - Under Fire
      4 min read

    • Article

      Banks’ Placements With The Central Bank

      Mar 18, 2022

      The ongoing debate across the country shows that the financial gap at the Central Bank (BDL) exceeds $55 billion taking into account the value of gold and BDL’s foreign currencies. The discourse in this regard often includes a lot of blame for the ba

      6 min read

    • Article

      Do Bonds Offer Opportunity In A Post-Covid-19 World?

      Jun 19, 2020

      the Covid-19 pandemic has seen monumental swings in investor sentiment. While it cannot be denied that there are many investment risks that may persist after the pandemic, there is also great value to be found. Are bonds attractive enough to offer in

      3 min read

    • Article

      The Paradox Of Debt

      Mar 28, 2024

      Debt as a percentage of GDP has grown rapidly over the past half century in the US and in other major developed countries. This is true of both government and private-sector debts. In the US, total debt grew from about 150% of GDP in 1970 to around 3

      3 min read

    • Article

      Which Asset Classes To Consider For An Income-producing Portfolio

      Oct 10, 2020

      WHILE working people invest to accumulate savings, a large group of people – mostly over the age of 65 – have invested their accumulated savings to provide an income. The second type of investment is very different from the first. The return on an in

      3 min read

    • Article

      From The Editor...

      Jul 7, 2023

      From The Editor...
      2 min read

    • Article

      Mixed Prospects

      Feb 11, 2020

      Mixed Prospects
      7 min read

    • Article

      Which Asset Classes To Consider For An Income-producing Portfolio

      Oct 10, 2020

      WHILE working people invest to accumulate savings, a large group of people – mostly over the age of 65 – have invested their accumulated savings to provide an income. The second type of investment is very different from the first. The return on an in

      3 min read

    • Article

      Which Asset Classes To Consider For An Income-producing Portfolio

      Oct 10, 2020

      WHILE working people invest to accumulate savings, a large group of people – mostly over the age of 65 – have invested their accumulated savings to provide an income. The second type of investment is very different from the first. The return on an in

      3 min read

    • Article

      From The Editor...

      Jan 6, 2023

      From The Editor...
      2 min read

    • Article

      Financial And Monetary Issues Frankness And Transparency Are Needed

      Jul 7, 2020

      There is consensus among the statements and writings of people in power, and the experts, in the media and on social media, on a treatment for the current crisis. Mostly, these various statements address the “protection of small depositors,” recapita

      7 min read

    • Article

      A Once-in-a-decade Investment Opportunity

      Jun 19, 2020

      much has been said and reported lately about emergent golden opportunities for investors while the herd stampedes away from markets. Kokkie Kooyman, a director at Denker Capital and the portfolio manager of the Denker Global Financial Fund and its ra

      3 min read

    • Article

      Critique Of The Government Plan

      Jul 7, 2020

      Critique Of The Government Plan
      11 min read

    • Article

      Essay Calm After The Storm

      Dec 9, 2021

      Essay Calm After The Storm
      8 min read

    • Article

      India Inc’s Rising Cost of External Capital

      Jun 25, 2020

      India needs external capital to grow. This has been true since the early years of Central planning following independence when India relied on external debt raised mostly by its Central and state governments from foreign governments and multilateral

      6 min read

    • Article

      32 Ways to Earn Up to 9% on Your Money Now

      May 8, 2020

      In addition to taking a vast human toll, the coronavirus pandemic has mercilessly infected virtually every corner of the investment world. As markets plunged and seized up, the Federal Reserve dropped its short-term interest rate to zero and began in

      14 min read

    • Article

      What You Need to Know About the Shadow Banking System Now

      Jun 21, 2019

      The term "shadow banking" often elicits thoughts of shady back-alley dealings and loan sharks waiting to take drastic measures against debtors who can't pay. While that makes for an interesting story, it couldn't be further from the truth. Most cons

      6 min read

    • Article

      It's The Politics, Stupid!

      Dec 6, 2019

      On the first day of October, the Ministry of Finance issued a statement about the credit rating of the Government of Lebanon issued by Moody's Investors Services (MIS). The statement was released following the meeting of the committee in charge of re

      6 min read

    • Article

      A Human Story

      Aug 20, 2020

      A Human Story
      6 min read

    • Article

      The Benefits Of A Bond Bear Market

      Jul 29, 2022

      Is the rise in bond yields and corresponding fall in prices bad news or good news? It depends on your perspective. In the past year yields on ten-year gilts have risen from 0.5% to a mid-June peak above 2.5%, though they have since slipped back below

      3 min read

    • Article

      The Return To Normalcy Is Fraught With Uncertainty

      Apr 30, 2020

      the return to normalcy in global markets may take much longer than anticipated. The average surge of 20% in global markets at the end of April, following the March meltdown, may be an indication of a swift recovery going forward, similar to how marke

      3 min read

    Reviews for Reviving the Case for GDP-Indexed Bonds

    0 ratings

    0 ratings0 reviews

    What did you think?

    Tap to rate

    Review must be at least 10 words