Central bank transparency and sovereign risk ratings: a panel data approach

Gabriel Montes and Diego Silveira Pacheco Oliveira ()
Additional contact information
Diego Silveira Pacheco Oliveira: Fluminense Federal University

International Economics and Economic Policy, 2019, vol. 16, issue 2, No 7, 417-433

Abstract: Abstract This paper analyzes the effect of central bank transparency on sovereign risk ratings. We address two channels through which central bank transparency affects sovereign risk ratings: the first is the direct channel, and it occurs due to the reduction of uncertainties regarding monetary policy decisions; the second is an indirect channel, and the transmission of the effect occurs through the inflation rate. We use a sample of 50 countries (where 40 are developing countries) for the period 1998–2014, and panel data methodology. The estimates suggest countries with greater central bank transparency present lower levels of inflation, and better sovereign risk ratings. Governments can raise their sovereign risk ratings by making efforts to raise central bank transparency. The results are observed for the full sample, and for the sample of developing countries.

Keywords: Sovereign ratings; Central bank; Transparency; Inflation (search for similar items in EconPapers)
JEL-codes: E31 E58 F34 G15 H63 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s10368-017-0394-2 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:iecepo:v:16:y:2019:i:2:d:10.1007_s10368-017-0394-2

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10368/PS2

DOI: 10.1007/s10368-017-0394-2

Access Statistics for this article

International Economics and Economic Policy is currently edited by Paul J.J. Welfens, Holger C. Wolf, Christian Pierdzioch and Christian Richter

More articles in International Economics and Economic Policy from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().