Exogenous and instrumental variables

Ratings

Expected signs

Regression with LGDP as endogenous variable

Gross Domestic Product shifted by one year

GDP(−1)

+

Public Infrastructure

INFRA

+

Public expenses

PUBSPEND

+

Gross Capital Formation

GFCF

+

Commercial opening

OPEN

+/−

Share of Agriculture in value added

IGA

+

Economic inflation

TINF

−

Liquidity Ratio

DEVF

+

Political instability

INST

−