We empirically analyse the appropriateness of indexing emerging market sovereign debt to US real interest rates. We find that policy-induced exogenous increases in US rates raise default risk in emerging market economies, as hypothesised in the theoretical literature. However, we also find...

In recent years there has been considerable variation in saving patterns across countries and regions, with implications for the configuration of global current account balances, asset valuations and real interest rates. This paper looks at the empirical drivers behind these trends. It uses a...