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Country-risk premium in the periphery and the international financial cycle 1999-2019

Investigacion Economica, ISSN: 2594-2360, Vol: 79, Issue: 313, Page: 78-111
2020
  • 9
    Citations
  • 0
    Usage
  • 19
    Captures
  • 0
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    9
    • Citation Indexes
      7
    • Policy Citations
      2
      • Policy Citation
        2
  • Captures
    19

Article Description

In the context of the pull-push debate on the weight that external or internal factors have in the behavior of capital flows, this article aims to empirically assess the extent to which the push factors linked to global liquidity determine the changes in the risk premium of a set of countries of the periphery in the period 1999-2019. We also test for a structural change in the premium risk series in 2003. We find that push factors play a predominant role (compared to pull factors) in explaining country-risk spreads changes in our selected set of peripheral countries and that there was indeed a substantial general reduction in country-risk premia after 2003. The results are in agreement both with the view that cycles in peripheral economies are subordinated to global financial cycles and also that such global conditions substantially improved compared to the 1990s.

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