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We investigate the effects of official fiscal data and creative accounting signals on interest rate spreads between bond yields in the European Union. Our model predicts that risk premia contained in government bond spreads should increase in both, the official fiscal position and the expected creative part of fiscal policy. The relative importance of these two signals depends on the transparency of the country. Greater transparency reduces risk premia. The empirical results confirm the hypotheses. Creative accounting increases the spread. The increase of the risk premium is stronger if financial markets are unsure about the true extent of creative accounting. Fiscal transparency reduces risk premia. Instrumental variable regressions confirm these results by addressing potential reverse causality problems and measurement bias.

Zsfassung in dt. Sprache

A brilliant and vigorous observer of both French and British societies, which she knows intimately, 32-year-old Agnes Catherine Poirier has spent the last ten years explaining the peculiarities of France to the British and of Britain to the French. Not an easy job.

pt. I. Introduction : voices in the sexual conversation in antebellum America -- pt. II. The documents. Voices in the sexual conversation : the four frameworks ; Controversy and commerce ; Coda : the Comstock law of 1873