Sovereign risk and real business cycles in a small open economy

Borradores de Economia
Número: 
226
Publicado: 
Clasificación JEL: 
E52, E58, E31
Palabras clave: 
Economy Macroeconomic

Lo más reciente

Jhorland Ayala-García, Jaime Alfredo Bonet-Moron, Eduardo A. Haddad, Inácio F. Araújo
Hans-Erik Edsand, Andrés Aleán-Romero, Jhorland Ayala-García, Tania Jiménez Castilla, Sandra C. Valencia

This paper investigates the effect of sovereign risk on the stochastic rational expectations equilibrium of a real business cycle small open economy. The market is imperfect because the sovereign cannot commit to repay its outstanding debt and chooses to