HSS Graduate Student Third-Year Presentation

Welmar Rosado | Political Rating Cycles

Abstract

In this paper I analyze whether there is evidence that rating agencies adjust the timing of their rating adjustments as a function of the electoral calendar. I propose a formal model of the political rating game and I estimate panel models using data from state non-guaranteed debt ratings and gubernatorial elections in Mexico during 2005-2015. Both my formal and empirical results suggest that rating agencies are delaying rating downgrades, in particular for very competitive elections.