About this work
Low government bond yields can overstate the fiscal room available after a crisis. Drawing on emerging market experience, this August 2021 analysis defines fiscal space through access to investors willing to absorb new debt at low yields. It argues that deteriorating market access during the pandemic also affected advanced economies, complicating the case for more deficit spending based on yields alone.
Abstract
Low government bond yields can overstate the fiscal room available after a crisis. Drawing on emerging market experience, this August 2021 analysis defines fiscal space through access to investors willing to absorb new debt at low yields. It argues that deteriorating market access during the pandemic also affected advanced economies, complicating the case for more deficit spending based on yields alone.
Cite this work
Robin Brooks, Jonathan Fortun, Jonathan Pingle (2021). Global Macro Views: Fiscal Space and Market Access. Institute of International Finance.