Remember Me
Or use your Academic/Social account:


Or use your Academic/Social account:


You have just completed your registration at OpenAire.

Before you can login to the site, you will need to activate your account. An e-mail will be sent to you with the proper instructions.


Please note that this site is currently undergoing Beta testing.
Any new content you create is not guaranteed to be present to the final version of the site upon release.

Thank you for your patience,
OpenAire Dev Team.

Close This Message


Verify Password:
Verify E-mail:
*All Fields Are Required.
Please Verify You Are Human:
fbtwitterlinkedinvimeoflicker grey 14rssslideshare1
Publisher: Elsevier
Languages: English
Types: Article

Classified by OpenAIRE into

mesheuropmc: health care economics and organizations
This paper investigates several aspects of the relationship between sovereign credit ratings and fiscal discipline. The analysis of over one thousand country–year observations for 93 countries during the 1999–2010 period reveals that a country’s debt level is likely to increase with higher ratings, confirming the existence of pro–cyclicality and path dependence of ratings. In addition, the study finds no evidence to support the theory of Political Business Cycle, which implies that political ambitions may lead to fiscal worsening following a rating upgrade. The study findings further demonstrate that institutional quality is an important factor in the ratings–fiscal discipline nexus.
  • The results below are discovered through our pilot algorithms. Let us know how we are doing!

    • Afonso, A., Agnello, L., and Furceri, D. (2010). Fiscal Policy Responsiveness, Persistence, and Discretion. Public Choice, 145(3):503-530.
    • Afonso, A. and Gomes, P. (2011). Do Fiscal Imbalances Deteriorate Sovereign Debt Ratings? Revue ´Economique, 62(6):1123-1134.
    • Aizenman, J., Binici, M., and Hutchison, M. (2013). Credit Ratings and the Pricing of Sovereign Debt During the Euro Crisis. Oxford Review of Economic Policy, 29(3):582-609.
    • Akhmedov, A. and Zhuravskaya, E. (2004). Opportunistic Political Cycles: Test in A Young Democracy Setting. The Quarterly Journal of Economics, 119(4):1301-1338.
    • Andrews, M. (2010). Good Government Means Different Things in Different Countries. Governance, 23(1):7-35.
    • Arellano, M. and Bover, O. (1995). Another Look at the Instrumental Variable Estimation of ErrorComponents Models. Journal of Econometrics, 68(1):29-51.
    • Balassone, F., Franco, D., and Zotteri, S. (2006). EMU Fiscal Indicators: A Misleading Compass? Empirica, 33(2-3):63-87.
    • Bangia, A., Diebold, F. X., Kronimus, A., Schagen, C., and Schuermann, T. (2002). Ratings Migration and the Business Cycle, with Application to Credit Portfolio Stress Testing. Journal of Banking & Finance, 26(2-3):445-474.
    • Berger, H. and Woitek, U. (1997). How Opportunistic are Partisan German Central Bankers: Evidence on the Vaubel Hypothesis. European Journal of Political Economy, 13(4):807-821.
    • Block, S. A. (2002). Political Business Cycles, Democratization, and Economic Reform: the Case of Africa. Journal of Development Economics, 67(1):205-228.
    • Block, S. A. and Vaaler, P. M. (2004). The Price of Democracy: Sovereign Risk Ratings, Bond Spreads and Political Business Cycles in Developing Countries. Journal of International Money and Finance, 23(6):917-946.
    • Blundell, R. and Bond, S. (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87(1):115-143.
    • Butkiewicz, J. L. and Yanikkaya, H. (2011). Institutions and the Impact of Government Spending on Growth. Journal of Applied Economics, 0:319-341.
    • Cantor, R. and Packer, F. (1995). Sovereign Credit Ratings. Current Issues in Economics and Finance, 1(Jun).
    • Cantor, R. and Packer, F. (1996). Determinants and Impact of Sovereign Credit Ratings. Economic Policy Review, (Oct):37-53.
    • Celasun, O. and Harms, P. (2011). Boon Or Burden? The Effect Of Private Sector Debt On The Risk Of Sovereign Default In Developing Countries. Economic Inquiry, 49(1):70-88.
    • Dimitrakopoulos, S. and Kolossiatis, M. (2015). State Dependence and Stickiness of Sovereign Credit Ratings: Evidence from a Panel of Countries. Journal of Applied Econometrics, page forthcoming.
    • Eijffinger, S. (2012). Rating Agencies: Role and Influence of Their Sovereign Credit Risk Assessment in the Eurozone. Journal of Common Market Studies, 50(6):912-921.
    • Erdem, O. and Varli, Y. (2014). Understanding the Sovereign Credit Ratings of Emerging Markets. Emerging Markets Review, 20(C):42-57.
    • Ferri, G., Liu, L.-G., and Stiglitz, J. E. (1999). The Procyclical Role of Rating Agencies: Evidence from the East Asian Crisis. Economic Notes, 28(3):335-355.
    • Gültekin-Karaka¸s, D., Hisarciklilar, M., and ¨Oztürk, H. (2011). Sovereign Risk Ratings: Biased Toward Developed Countries? Emerging Markets Finance and Trade, 47(0):69-87.
    • Hanusch, M. and Vaaler, P. M. (2013). Credit Rating Agencies and Elections in Emerging Democracies: Guardians of Fiscal Discipline? Economics Letters, 119(3):251-254.
    • Pagano, M. and Volpin, P. (2010). Credit Ratings Failures and Policy Options. Economic Policy, 25:401-431.
    • Panizza, U., Sturzenegger, F., and Zettelmeyer, J. (2009). The Economics and Law of Sovereign Debt and Default. Journal of Economic Literature, 47(3):651-98.
  • Inferred research data

    The results below are discovered through our pilot algorithms. Let us know how we are doing!

    Title Trust
  • No similar publications.

Share - Bookmark

Cite this article