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With age comes immaturity: Do countries with older populations issue shorter maturity debt?

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  • Senel, Gonca
  • Wright, Mark L.J.

Abstract

Recent work has found that countries with older populations face steeper yield curves and issue shorter maturity debt than do younger countries. We reexamine these findings using a new database of public debt maturity and yields for OECD countries. We first show that the behavior of eurozone countries in the pre-euro period drives these results. Next, including more recent data from the post-euro period, we show that the relationship between population age, maturity, and yield curve slopes disappears. This finding is robust to excluding high-credit-risk countries. Last, we show that these patterns reemerge after the European debt crisis, suggesting that eurozone capital markets have resegmented.

Suggested Citation

  • Senel, Gonca & Wright, Mark L.J., 2021. "With age comes immaturity: Do countries with older populations issue shorter maturity debt?," Economics Letters, Elsevier, vol. 209(C).
    • Handle: RePEc:eee:ecolet:v:209:y:2021:i:c:s0165176521003773
    DOI: 10.1016/j.econlet.2021.110100
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    References listed on IDEAS

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    More about this item

    Keywords

    Public debt; Debt maturity; Aging; Sovereign default; Eurozone;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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