Comparative Analysis of Government Bonds of Emerging vs Developed Economies: Monte Carlo VaR

Abstract

This paper aims at providing a thorough comparative analysis of government bonds of emerging and developed economies. Government bonds are crucial when it comes to providing citizens a relatively risk free and stable investment opportunity and for funding government projects undertaken for the nation’s benefits. VAR Monte Carlo simulation has been utilized to compare the risk aspect of the government securities of emerging and developed economies. Multi-regression has been performed to back the VAR results. Moreover, the literature review synthesizes the existing research on the intricacies of the government bonds in both types of economies.