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Policy Strategy Towards Achieving Investment Grade Status for Emerging Economies

Author

Listed:
  • Eufrocinio M. Bernabe, Jr.

    (The South East Asian Central Banks (SEACEN) Research and Training Centre)

  • Dongkoo Chang

    (The South East Asian Central Banks (SEACEN) Research and Training Centre)

Abstract

The paper discusses a possible policy strategy towards achieving an investment grade status for emerging economies. Through the use of an econometric model, it determines which among the macroeconomic variables considered by Credit Rating Agencies (CRAs) impacts speculative and investment grade economies. More importantly, it ranks these macroeconomic determinants according to its largest effect on the probability of achieving an investment grade status. This vital information will aid policymakers in identifying target areas where government efforts and resources should be focused.

Suggested Citation

  • Eufrocinio M. Bernabe, Jr. & Dongkoo Chang, 2014. "Policy Strategy Towards Achieving Investment Grade Status for Emerging Economies," Working Papers wp04, South East Asian Central Banks (SEACEN) Research and Training Centre.
    • Handle: RePEc:sea:wpaper:wp04
    as

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    File URL: https://www.seacen.org/publications/RePEc/702003-100343-PDF.pdf
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    References listed on IDEAS

    as
    1. International Monetary Fund, 1998. "The Relative Importance of Political and Economic Variables in Creditworthiness Ratings," IMF Working Papers 1998/046, International Monetary Fund.
    2. Vincent Choon-Seng Lim & Nurulhuda Mohd. Hussain, 2014. "Stock Market Performance: Foretelling and Crisis Signalling?," Working Papers wp01, South East Asian Central Banks (SEACEN) Research and Training Centre.
    3. Min B. Shrestha & Theresia A. Wansi, 2014. "Drivers of Reserves Accumulation in the South East Asian Countries," Working Papers wp02, South East Asian Central Banks (SEACEN) Research and Training Centre.
    4. Mr. Ashok Vir Bhatia, 2002. "Sovereign Credit Ratings Methodology: An Evaluation," IMF Working Papers 2002/170, International Monetary Fund.
    5. Vincent Choon-Seng Lim & Seow Yun Yee, 2014. "Research-Integrated Learning: A Distinct Possibility," Working Papers wp03, South East Asian Central Banks (SEACEN) Research and Training Centre.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Credit Ratings; Credit Rating Agencies; Governance; Political Stability Indicators; Investment Grade; Econometric Model with Panel Data;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

    Statistics

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