摘要：This paper explores the relationship between inflation
and the existence of a local, nominal, publicly traded, longmaturity,
domestic currency bond market. Domestic bond
markets have an unclear effect on inflation; they present issuing
governments with the opportunity to inflate away their
debt obligations, but they also expose bondholders to capital
losses through inflation, creating a potential anti-inflationary
force. We ask whether the latter effect is apparent empirically.
We use a panel of data, examining inflation before and
after the introduction of a domestic bond market. Inflationtargeting
countries with a bond market experience inflation at
least 3 to 4 percentage points lower than those without one.
This effect is economically and statistically significant; it is
also insensitive to a variety of estimation strategies. In particular,
we use a wide variety of political and fiscal instrumental
variables to account for the potential endogeneity of domestic
bond issuance. Moreover, we do not find a similar effect for
indexed or foreign currency bonds.
