An Alternative Methodology for Estimating Credit Quality Transition Matrices

Borradores de Economia
Número: 
478
Publicado: 
Clasificación JEL: 
C4, E44, G21, G23, G38
Palabras clave: 
Firms, macroeconomic variables, firm-specific covariates, hazard function

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This study presents an alternative way of estimating credit transition matrices using a hazard function model. The model is useful both for testing the validity of the Markovian assumption, frequently made in credit rating applications, and also for estim