Can a negative shock to sovereign ratings invoke a vicious cycle of increasing government bond yields and further …. However, the persistence of ratings is sufficiently high that a rating shock can have substantialcosts if it occurs at a … sharply, and for a long time. Yet, simulation studies based on our estimations show that it is highly improbable that rating …

financial conditions in EMEs, and, whether it is transmitted through portfolio flows. We find that a U.S. UMP shock … easing of their own monetary policy stance in response to an expansionary U.S. shock. …