Rating for government debt and economic stability
| Autor: | Kenichi Tamegawa |
|---|---|
| Rok vydání: | 2016 |
| Předmět: |
050208 finance
Financial economics media_common.quotation_subject 05 social sciences Debt-to-GDP ratio Government debt Monetary economics Credit rating Debt 0502 economics and business Economics Bond credit rating Internal debt Credit enhancement 050207 economics Debt levels and flows General Economics Econometrics and Finance media_common |
| Zdroj: | The Journal of Economic Asymmetries. 13:35-44 |
| ISSN: | 1703-4949 |
| DOI: | 10.1016/j.jeca.2015.05.003 |
| Popis: | In this study, we incorporate a credit rating scheme for government debt into a standard dynamic general equilibrium model. We then analyze the relationship between a credit rating system and economic stability. The main result demonstrates the existence of an unstable rating system. Such a system would be generated by information asymmetries between rating agencies and government stances regarding debt. We also find that if the sensitivity of credit ratings to debt-to-GDP ratio is high, then it could lead to economic instability in the sense that this ratio explodes. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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