Long-term government bond yields and macroeconomic fundamentals: Evidence for Greece during the crisis-era

•We study the impact of four major macroeconomic variables on 10 years Greek government bond.•We found stronger impact of deficit during the crisis era.•Debt to GDP ratio does not play any significant role.

This paper studies the influence of macroeconomic fundamentals and the underlying 10 years Greek government bonds. We examine for the period between Q12001 up to end to Q42012, applying four major macroeconomic variables such as Debt to GDP ratio, deficit, inflation and unemployment. We found that, overall, deficit, inflation and unemployment among others, play a more significant role as determinants of the 10-year Greek bond yield, while isolating the period during the crisis macroeconomic factors strengthen their affect to the Greek Debt market.