Premium
Qu'est‐ce qui explique l'écart entre les rendements sur les débentures fédérales et provinciales ?
Author(s) -
Booth Laurence,
Georgopoulos George,
Hejazi Walid
Publication year - 2007
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1365-2966.2007.00440.x
Subject(s) - bond , yield (engineering) , debt , work (physics) , quality (philosophy) , economics , business , financial system , monetary economics , finance , engineering , mechanical engineering , philosophy , materials science , epistemology , metallurgy
. Although recent research has led to a deeper understanding of the factors determining yields on long‐term Canada bonds, there has been little corresponding work on provincial bonds. By using a carefully constructed new data set, we establish two important results. First, provincial fiscal positions (debt and deficits) are an important factor in determining yield spreads between provincial and Canada bonds. Second, we show that provincial bonds are a substitute for corporate debt, in that during recessionary ‘flights to quality’ their yields react like those on corporate bonds.