The Relative Importance of Political and Economic Variables in Creditworthiness Ratings

13 Pages Posted: 15 Feb 2006

See all articles by Nadeem Ul Haque

Nadeem Ul Haque

Pakistan Institute of Development Economics

Nelson C. Mark

University of Notre Dame - Department of Economics and Econometrics; National Bureau of Economic Research (NBER)

Donald J. Mathieson

International Monetary Fund (IMF)

Date Written: April 1998

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: Credit ratings, creditworthiness

JEL Classification: G15, G24, P52

Suggested Citation

Ul Haque, Nadeem and Mark, Nelson Chung and Mathieson, Donald J., The Relative Importance of Political and Economic Variables in Creditworthiness Ratings (April 1998). Available at SSRN: https://ssrn.com/abstract=882300 or http://dx.doi.org/10.2139/ssrn.882300

Nadeem Ul Haque (Contact Author)

Pakistan Institute of Development Economics ( email )

Quaid-i-Azam University Campus, P.O. Box. 1091
Islamabad, Capital 44000
Pakistan
+92-51-9217879 (Phone)
+92-51-9210886 (Fax)

HOME PAGE: http://www.saneinetwork.net/structure/st_comm/NadeemUlHaque.asp

Nelson Chung Mark

University of Notre Dame - Department of Economics and Econometrics ( email )

442 Flanner
Notre Dame, IN 46556
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Donald J. Mathieson

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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