The Impact of Fiscal Governance on Bond Markets: Evidence from Late Budgets and State Government Borrowing Costs
Publikation: Working paper › Forskning
Dokumenter
- Wp-10-11
Forlagets udgivne version, 348 KB, PDF-dokument
Does fiscal governance affect government borrowing costs? We operationalize fiscal governance as the ability of governments to pass a budget on time and, using a unique data set on budget enactment dates, analyze the effect of such late budgets on government bond yield spreads. Based on a sample of 36 US states in the period 1988-1997, we estimate that a budget delay of 30 days has a long run impact on the yield spread between 2 and 10 basis points. States with sufficient liquidity in the form of large reserves face small or no costs from late budgets.
Originalsprog | Engelsk |
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Udgiver | Department of Economics, University of Copenhagen |
Antal sider | 22 |
Status | Udgivet - 2010 |
Bibliografisk note
JEL classification: H72, H61, H63
- Det Samfundsvidenskabelige Fakultet
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