Rating Method Sovereign Wikirating Index (SWI)

Last update: 2013713  Credit rating table 
Contents
Criteria and BaseData
The Sovereign Wikirating Index (SWI) uses the following five criteria (with weights):
 Public debt (in % of the GDP)
 Account balance (in % of the GDP)
 GDP growth rate
 Inflation rate
 Unemployment rate
The resulting value is calibrated by multiplying it with a scaling factor, which is composed by the Human Development Index (HDI)^{[1]} and the Corruption Perceptions Index^{[2]}. The third index Political Instability Index^{[3]} originally was used for the first version of the SWI^{[4]}. Each criterium is calibrated with respect to the relative minimum and maximum value of all countries. For some criterion a threshold value is defined in order to avoid distorted values.
Short Title  Long Title  Value  Weight  Real Min  Real Max  SWI Min  SWI Max 

HD  Human Development Index  Weighted index of development indicators  60%  0  1^{[scale 1]}  0  1 
CO  Perceptions Index  Index of perceived corruption  40%  0  10^{[scale 1]}  0  1 
PI  Political Instability Index  Index of political instability (not used any more)^{[4]}  0%^{[4]}  0  10^{[scale 1]}  0  1 
PD  Public Debt  Debt/GDP as %, reflects the economies ability to honour loans.  50%  0  ∞  15  90 
AB  Current Account Balance  Current account balance as % of GDP, reflects foreign inflows and outflows.  20%  ∞  ∞  20  20 
PG  GDP Growth  Domestic growth an an annual %  10%  1  ∞  0.1  0.1 
IR  Consumer Price Index  CPI as %  10%  1  ∞  0.02  0.2 
UR  Unemployment Rate  Rate of unemployment as %  10%  0  1  0.03  0.3 
R  Rating  Result of SWI calculation as %  –  0  1  0  1 
 ↑ ^{1.0} ^{1.1} ^{1.2} Raw Data of social scaling factors is divided by the Real Max value to normalize the input.
Formula
Definition  Explanation 

Let c be an element in the set of countries C:

That means that every c is a country. 
Let R be the vector of ratings, so that

That means that R_{c} is the rating for the country c and every rating is ranging from 0 to 100%. 
Let be the dimension of v.  The function basically counts the number of elements in the vector. In example, is the total number of ratings and thus the number of rated countries. 
Let the minimal, and the maximal value of v.  These functions find the smallest and the biggest number in a set of numbers, such as a vector. This is needed for normalization. 
.  We are defining a scalenormalizating function on an vector . 
Let .  x is a matrix. We define the base B of this matrix, so that it contains vectors with factors for individual countries in the direction , while the economic and social factors are in direction . 
Let and  s is an indexer for the social factors and e is the indexer for economic factors. 
, , , , , , ,  Applying the weights. The vector contains the (scalar) weights for the individual economic and social factors. 
By using the Einstein notation, we weight and sum the social factors to get the scaling factor. We also weight and sum the economic factors. Then we multiply the two results.  
We finally do some normalisation on the rating r, so that the resulting values are ranging from 0 to 100% and the values represent the performance relative to the other rated countries. The result of this formula is the SWI rating R. n is a vector that contains the number of given ratings for a specific country and thus the trust in the values. 
Calculation
The calculations of the values are done with a spreadsheet:
 Download:
 For 2013: SWI (Version 2, 2013)
 For 2011: SWI (Version 2, 2011)
Old version:
 Download: SWI (Version 1, 2011)  Political Instability Index included
 List of countries by Scaling factor (2011)
General Variable Modifiers
For example, the variable AB.
 AB = Number used in calculations for SWI.
 rAB = Raw or real value, actual data from source in whichever format it is acquired.
 wAB = Weighting value for the data.
 minAB = Floor value of variable, will cause ABC to equal 0 or 100 if ABC is below this value.
 maxAB = Ceiling value of variable, will cause ABC to equal 0 or 100 if ABC is above this variable.
 nAB = Number of ratings (for rating)
So for instance, if the real value (rAB) was 4 on a 10 point scale, this would be divided by 10 to create the value for calculations (AB) which, in calculations, is multiplied by the weighting (e.g. 0.5 for 50% weight.)
List
 List of countries by credit rating (SWI)
 List of countries by credit rating  comparison with SWI method
See also
Archives
References
 ↑ See Data_(countries)#Human_Development_Index_.28HDI.29
 ↑ See Data_(countries)#Corruption_Perceptions_Index_.28CPI.29
 ↑ See Data_(countries)#Political_Instability_Index_.28PII.29
 ↑ ^{4.0} ^{4.1} ^{4.2} Unfortunately this index has not been updated since 2010 from "The Economist", therefore it has been removed as criteria from the SWI, and the ratings for 2011 are retroactively recalculated.
