مقاله انگلیسی رایگان در مورد اثر انعطاف ناپذیری دستمزد بر رتبه اعتباری ( الزویر )

مقاله سال 2017

A sovereign credit rating (SCR) can be used to assess a country’s ability to repay its public debt on time; it in return affects the interest rates of a country in the international financial market (Afonso et al., 2011; Chen et al., 2012). With the occurrence of various economic crises, the major credit-rating agencies have downgraded the SCR of a number of major countries (Bozic and Magazzino, 2013). In this context, the determinants of SCR have been at the core of macroeconomic research (Gültekin-Karakaş et al., 2011). A pioneering study by Cantor and Packer (1996) reports that SCR can be largely explained by various macroeconomic variables, including per-capita income, GDP growth, inflation, external debt, level of economic development, and default history. Previous studies have pinpointed other variables, such as investment-to-GDP ratio and foreign reserves (Afonso et al., 2011; Bissoondoyal-Bheenick, 2005). The growing body of recent literature has focused on labor market rigidities, such as labor market friction (Favilukis and Lin, 2013) and unemployment (Bai, 2015), as the core determinants of SCR.

The major credit-rating agencies have acknowledged the importance of labor market rigidities as a cause of corporate default. These agencies have incorporated labor market rigidities, as a key SCR measure, into their respective evaluation models. For instance, Moody’s proposed in 2007 a default-forecasting model (i.e., the credit transition model) that measures the impact of macroeconomic conditions on default by using only two factors: the unemployment rate and the high yield spread of treasuries (Bai, 2015). Fitch Ratings also includes unemployment rate in its unique model (i.e., the sovereign rating model). However, although major credit-rating agencies assess the importance of labor market rigidities, only a few scholarships—save for those of Favilukis and Lin (2013) and Bai (2015)—discuss the impact of labor market rigidities on a country’s credit rating.

Specifically, downward wage rigidity has been regarded as playing a crucial role among the labor market conditions, in terms of employment adjustment and unemployment (Batra, 2002; Beckerman, 1988; Dias et al., 2013; Fabiani et al., 2010; Favilukis and Lin, 2013; Grubb et al., 1983; Nickell et al., 2005). The literature on downward wage rigidity has explored various negative macroeconomic outcomes (Altonji and Devereux, 2000; Bauer et al., 2007; Beissinger and Knoppik, 2003; Chen and Zhang, 2007; Elsby, 2005; Fehr and Goette, 2005; Goette et al., 2007; Rhee and Song, 2013; Song et al., 2017). The negative impact of wage rigidity became even more important in the period during and after the recent recession (Doris et al., 2013). Our study grew out of conversations concerning this matter, especially where downward wage rigidity can be perceived as undesirable from the viewpoint of a country’s credit rating.