The Relative Importance of Political and Economic Variables in Creditworthiness Ratings
April 1, 1998
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Summary
This study examines the relative importance of political and economic variables in the determination of a country’s standing in credit ratings provided by commercial rating agencies. It finds that creditworthiness appears to be determined primarily by economic variables. While including political events can improve the explanatory power of the regressions, the exclusion of political variables does not bias the parameter estimates for the effects of economic variables.
Subject: Balance of payments, Credit ratings, Current account, Export performance, External debt, Financial institutions, International trade, Money, Treasury bills and bonds
Keywords: country, country creditworthiness rating, Credit ratings, creditworthiness, Current account, dependant variable, EIU ratings regression, Export performance, Global, government, omitted variables bias, rating, rating agency, Treasury bills and bonds, WP
Pages:
13
Volume:
1998
DOI:
Issue:
046
Series:
Working Paper No. 1998/046
Stock No:
WPIEA0461998
ISBN:
9781451846522
ISSN:
1018-5941
