TY  - JOUR
AU  - Burger,John D.
AU  - Warnock,Francis E.
TI  - Local Currency Bond Markets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12552
PY  - 2006
Y2  - October 2006
UR  - http://www.nber.org/papers/w12552
L1  - http://www.nber.org/papers/w12552.pdf
N1  - Author contact info:
John D.. Burger
Loyola University Maryland
4501 N. Charles Street
Baltimore MD 21210-2699
E-Mail: jburger@loyola.edu

Francis E. Warnock
Darden Business School
University of Virginia
Charlottesville, VA 22906-6550
Tel: 434/924-6076
Fax: 434/243-8945
E-Mail: warnockf@darden.virginia.edu
AB  - We analyze the development of 49 local bond markets.  Our main finding is that policies and laws matter: Countries with stable inflation rates and strong creditor rights have more developed local bond markets and rely less on foreign-currency-denominated bonds.  The results suggest that "original sin" is a misnomer.  Emerging economies are not inherently dependent upon foreign-currency debt.  Rather, by improving policy performance and strengthening institutions they may develop local currency bond markets, reduce their currency mismatch, and lessen the likelihood of future crises.
ER  -