SOVEREIGN DEBT RISK: FINANCIAL OPENNESS AND MONETARY POLICY AS SHIELDS, TRADE OPENNESS AS A VULNERABILITY IN G7 AND BRICS

Authors

  • Moeez Imtiaz Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad
  • Hammad Ali Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad
  • Aima Nadeem Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad
  • Mohib Farooqui Iqra University, Karachi

DOI:

https://doi.org/10.63878/cjssr.v4i1.2228

Abstract

This study investigates the effects of financial openness, trade openness, and monetary policy on sovereign debt risk in BRICS and G7 economies from 2000 to 2023. Using advanced panel econometric techniques that account for cross-sectional dependence and heterogeneity including cointegration, random effects, and quantile regression the analysis finds that financial openness and credible monetary policy significantly reduce sovereign debt risk, whereas trade openness increases vulnerability to external shocks. Robustness checks confirm the consistency of these results across alternative specifications. The study highlights the interplay between financial integration, trade exposure, and policy frameworks in shaping sovereign debt dynamics, offering critical insights for policymakers in the studied economies.

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Published

2026-03-31

Issue

Vol. 4 No. 1 (2026): Contemporary Journal of Social Science Review

Section

MANAGEMENT SCIENCES

License

Copyright (c) 2026 Contemporary Journal of Social Science Review

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

How to Cite

SOVEREIGN DEBT RISK: FINANCIAL OPENNESS AND MONETARY POLICY AS SHIELDS, TRADE OPENNESS AS A VULNERABILITY IN G7 AND BRICS. (2026). Contemporary Journal of Social Science Review, 4(1), 113-127. https://doi.org/10.63878/cjssr.v4i1.2228