Presentation held at the European Commission DG ECFIN – OECD Economics Department workshop on GDP-linked government bonds on 17 January 2018 in Brussels, Belgium.

Background

v GDP-linked bonds seem to hold several important benefits for emerging market (EM) issuers

v The higher volatility displayed by GDP growth in EM should in principle also appeal to certain categories of capital market investors

v Yet aside from the issuance of GDP warrants, there has been no momentum – this is especially the case for countries with challenging debt dynamics

v What are the factors that explain this apparent puzzle?