Arbeitspapier

Sovereign Risk, Elections, and Contagion

This paper aims to quantify the political risk effect and its different economic implications in normal and crisis situations through the proxy analysis of election and the sovereign bond spreads. Our study leads to three main findings. First, in normal economic situations, elections and government turnovers expand bond spreads, demonstrating investors' concern over the possibility of government policies or instability brought by the election. During a crisis, however, investors prefer change, indicating hope in new policies ameliorate public finances. Second, due to the prolonged eurozone sovereign debt crisis, elections in European countries have stronger contagion effects in their own region during a global slowdown period than a normal period. However, their effect does not carry over globally after the 2008 financial crisis. Third, results show that the election induced peak shrinks from 3 months before and after the election date to 1–2 months when the economic situation turns from normal to a downgraded period.

Sprache
Englisch

Erschienen in
Series: ADB Economics Working Paper Series ; No. 348

Klassifikation
Wirtschaft
International Lending and Debt Problems
Financial Aspects of Economic Integration
Economywide Country Studies: Europe
Thema
election
sovereign bond
contagion
financial crisis
Europe
Asia

Ereignis
Geistige Schöpfung
(wer)
Li, Chi
Balding, Christopher
Lee, Minsoo
Ereignis
Veröffentlichung
(wer)
Asian Development Bank (ADB)
(wo)
Manila
(wann)
2013

Handle
Letzte Aktualisierung
20.09.2024, 08:22 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Li, Chi
  • Balding, Christopher
  • Lee, Minsoo
  • Asian Development Bank (ADB)

Entstanden

  • 2013

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