ECONOMIC FREEDOM AND STATE BOND RATINGS

ECONOMIC FREEDOM AND STATE BOND RATINGS

Are state bond ratings, ceteris paribus, related to economic freedom? We test for the relationship between economic freedom and an aggregate index comprised of ratings by Standard & Poor, Moody's, and Fitch. We also test for a relationship between economic freedom and the ratings by these t...

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Veröffentlicht in:Contemporary economic policy 2015-10, Vol.33 (4), p.668-677
Hauptverfasser: Belasen, Ariel R., Hafer, Rik W., Jategaonkar, Shrikant P.
Format: Artikel
Sprache:eng
Schlagworte:
Bond ratings
Bonds
Economic growth
Economic indicators
Economic policy
Economics
Effects
Financial analysis
Freedoms
Government bonds
Indexes
Quantitative analysis
Ratings & rankings
Real income
Samples
State
States
Statistics
Studies
Unemployment
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Beschreibung
Zusammenfassung:Are state bond ratings, ceteris paribus, related to economic freedom? We test for the relationship between economic freedom and an aggregate index comprised of ratings by Standard & Poor, Moody's, and Fitch. We also test for a relationship between economic freedom and the ratings by these three agencies individually. With a sample covering all 50 states for the period 1995–2008, the evidence strongly indicates that state bond ratings are positively and significantly related to overall economic freedom as well as three sub‐categories of economic freedom. Our results show that the quantitative impact of economic freedom on bond ratings is comparable to the effect of state real income and the unemployment rate. (JEL E43, H71)
ISSN:1074-3529
1465-7287
DOI:10.1111/coep.12098