Sovereign Risk and Macroeconomic Fluctuations

Número: 
225
Publicado: 
Clasificación JEL: 
C32, E32
Palabras clave: 
Macroeconomic, Fluctuations

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Luis E. Arango, Leonardo Bonilla-Mejía, Luz Adriana Flórez, Luis E. Arango
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This paper investigates the impact of sovereign risk on the stochastic rational expectations equilibrium of a pure exchange small open economy. International borrowing and lending arise from the interaction between a risk averse sovereign representative a