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[...] This last one was below in March 2007 and rose to over 29% in December 2011 (see graph accompanied by a downgrade of its rating from AAA to CCC (near-default payment) approved by the three main rating agencies (see graph 2). Following the downgrade of Greece's rating, the interest rates on public debt increase (see graph 1 and which automatically and further increases the burden of debt, and leads to new downgrades of the country's creditworthiness. rating of the State. A vicious circle is thus manifested, in which speculators (hedge funds, investment bank like Goldman Sachs) bet on the default of the State in question, by buying CDS (Swap Credit Default). [...]
[...] Keywords: sovereign rating, rating agencies, public debt sustainability, budgetary reaction function, Ordinary Least Squares Abstract The objective of this study is to analyze the sovereign rating and the role of agency. However, due to severe critics and their implication in the crisis of the last decade, it is relevant to analyze the sovereign rating by focusing on the fiscal sustainability and its political determinants in four developed countries, namely France, Germany, the United Kingdom and the United States. First, using the sustainability approach of Bohn (1998) based on fiscal reaction function, econometric findings using Ordinary Least Squares (OLS) reveal a positive response of the primary surplus to changes in debt in these countries. [...]
[...] More specifically, the abundance of raw materials negatively affects the economy of a country in six aspects: a slower economic growth; amplified risks of conflicts and civil wars; (iii) a decline in domestic savings; an increase in poverty and inequalities a higher rate of corruption; R&D hindered; These negative effects of raw materials on the economy constitute the 'Dutch disease' to then evolve towards a phase of eviction of non-related sectors, such as services for example (Corden, 199555). The Dutch disease This is then followed by a vicious circle, as the appreciation of the currency erodes the competitiveness of businesses in other sectors, as their costs increase relative to foreign competition. This results in the new eviction of non-commodity sectors and a specialization that plunges the country back into the curse of commodities. [...]
[...] (2000), « Assessing Fiscal Sustainability: a Review of Methods with a View to EMU Fiscal Sustainability Essays, Bank of Italy Balassone, F., Franco, D., et Zotteri, S. (2006), "EMU Fiscal Indicators: A Misleading Compass?" Empirica, Vol pp. 63-87. Becker, B. et Milbourn, T. (2011), "How did increased competition affect credit ratings?"" Journal of Financial Economics, Vol 493-514. Blanchard, O., Chouraqui, J-C., Hagemann, R. et Sartor, N. (1990), "The Sustainability of Fiscal Policy: New Answers to an Old Question"" OECD Economic Review, n° 15, autumn 1990, pp. [...]
[...] (1984) "LDC Foreign Borrowing et Default Risk : An Empirical Investigation, 1976-80" The American Economic Review pp. 726-734. Ennajar, R. et Laurent, P. (2005), 'Capital Outflows: The True Original Sin of Emerging Countries' International Economy pp. 121-153. Erb, C.B., Harvey, C.R. et Viskanta, T.E (1996), 'Political Risk, Economic Risk and Financial Risk' Financial Analysts Journal November-December, pp. 29-46. [...]
