How does the sovereign credit ratings history provided by independent ratings agencies affect domestic financial sector development and international capital inflows to emerging countries? We address this question utilizing a comprehensive dataset of sovereign credit ratings from Standard and Poor’s from 1995-2003 for a cross-section of 51 emerging markets. Within a panel data estimation framew...

In their wide-ranging paper, Prasad, Rajan, and Subramanian (PRS) update and explore a new dimension of the well-established, though seemingly perverse, Lucas puzzle—that capital tends to flow from poor to rich countries. Building on the recent finding by Gourinchas and Jeanne (2006) that capital flows to nonindustrial countries have been relatively concentrated among the slow, not the rapid gr...