The Relative Importance of Political and Economic Variables in Creditworthiness Ratings

International Monetary Fund

No 1998/046, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; rating; country; EIU ratings regression; government; Credit ratings; creditworthiness; country creditworthiness rating; rating agency; omitted variables bias; dependant variable; Treasury bills and bonds; Current account; Export performance; Global (search for similar items in EconPapers)
Pages: 13
Date: 1998-04-01
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Citations: View citations in EconPapers (36)

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