Extractive industries

Emerging Markets Borrow Short Term

Last Updated:
August 27, 2025
Regions:
Global
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0

The authors argue that one reason why emerging economies borrow short term is that it is cheaper than borrowing long term. This is especially the case during crises, as during these episodes the relative cost of long-term borrowing increases. They have constructed a unique database of sovereign bond prices, returns, and issuances at different maturities for 11 emerging economies from 1990 to 2009 and present a set of new stylized facts. On average, these countries pay a higher risk premium on long-term than on short-term bonds. During crises, the difference between the two risk premia increases and issuance shifts towards shorter maturities.

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Organization
World Bank Group
Topics
Extractive industries  
Last Updated
August 27, 2025
Release Year
2017
License
Creative Commons Attribution 4.0
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0
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