ISBN: 1437939147, 9781437939149
Author: Ceyhun Bora Durdu
Keywords: open, economies, small, risk, sovereign, default, news
Formats: Read Online And/Or Other Formats
Copyrights: General Copyright

Publisher: DIANE PublishingPublished Time: DIANE PublishingPages: 24This paper builds a model of sovereign debt in which default risk, interest rates, and debt depend not only on current fundamentals but also on news about future fundamentals. News shocks (NS) affect equilibrium outcomes because they contain info. about the future ability of the gov?t. to repay its debt. First, in the model with N......