Dollar debt and equity returns

Charles Braymen, Tirimba Obonyo, Nicholas E. Woessner

Research output: Contribution to journalArticlepeer-review


This article examines the relationship between US dollar-denominated debt and the correlations between the equity markets of 31 countries from 2007 to 2016. Our results indicate that the balance sheet mismatch imposed by the issuance of dollar-denominated debt by foreign firms leads to a common risk factor that extends across international boundaries. These results suggest that dollar-denominated debt should be considered in the design of internationally diversified equity portfolios alongside other factors of economic integration such as trade and foreign direct investment.

Original languageEnglish (US)
Pages (from-to)1-5
Number of pages5
JournalApplied Economics Letters
StatePublished - 2020

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


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