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Andreas Bergh. Foto.

Andreas Bergh

Universitetslektor

Andreas Bergh. Foto.

Trust Us to Repay: Social Trust, Long-Term Interest Rates, and Sovereign Credit Ratings

Författare

  • Andreas Bergh
  • Bjørnskov Christian

Summary, in English

This paper asks whether the sensitivity of market long-term interest rates and credit ratings is associated with cross-country differences in social trust. We note a number of theoretical mechanisms that suggest that macroeconomic shocks are more likely to be effectively dealt with in higher-trust societies. A set of panel estimates across middle- and high-income countries reveals that interest rates and credit ratings are substantially more sensitive to inflation and growth problems in low-trust countries. This finding sheds light on the differential market reactions to macroeconomic problems in seemingly comparable countries.

Avdelning/ar

  • Nationalekonomiska institutionen
  • Centrum för ekonomisk demografi

Publiceringsår

2021-05-06

Språk

Engelska

Publikation/Tidskrift/Serie

Journal of Money, Credit and Banking

Volym

53

Issue

5

Dokumenttyp

Artikel i tidskrift

Förlag

Wiley-Blackwell

Ämne

  • Economics

Nyckelord

  • social trust
  • credit ratings

Status

Published

ISBN/ISSN/Övrigt

  • ISSN: 1538-4616