This article examines whether rating agencies and investors perceive the sovereign risk of the new member states (NMS) of the European Union (EU) as different from that of other emerging markets. The results suggest the NMS have enjoyed favourable treatment since somewhere between 2002 and 2004,...

This article revisits whether budget deficits affect interest rates, and broadens the literature by examining whether financial globalization has changed this relationship. A structural model of interest determination is extended to account for the fact that official capital flows are determined...

In recent years financial globalization and benign global market conditions have helped emerging markets in their external financing and budgetary positions. This paper examines three related issues: (i) the importance of the impact of the benign financial environment on fiscal performance; (ii)...

References to policy credibility, particularly with regard to fiscal policy, are ubiquitous in both economic literature and financial markets, even though it is not directly observable. The case of the EU new member states (NMS)-emerging markets joining a supranational entity that is generally...

There has been a considerable literature regarding the incentives of policymakers as a prime reason for persistent fiscal deficits and a variety of fiscal rules have been proposed as a remedy. However, the often inadequate flexibility of rules and the success of policy delegation in the monetary...

"Various effects of rising integration of emerging markets into the global capital markets have been studied, yet not its potentially significant fiscal implications. This article argues that larger external financing implies a rising pass-through from external financial conditions to public...

This paper explores the determinants of long-term government bond yields in the Group of Seven (G-7) economies and analyzes the factors that could explain the conundrum of very low rates in the face of a variety of adverse factors in recent years. In particular, the paper focuses on the...

This Paper proposes a new measure of contagion that is good at anticipating future vulnerabilities. Building on previous work, it uses correlations of equity markets across countries to measure contagion, but in a departure from previous practice, measures contagion using the relationship of...