A General Equilibrium Model of Sovereign Default and Business Cycles
A General Equilibrium Model of Sovereign Default and Business Cycles – Enrique G. Mendoza and Vivian Z. Yue – IMF Working Paper, Research Department. July 2011 “Emerging markets business cycle models treat default risk as part of an exogenous interest rate on working capital, while sovereign default models treat income fluctuations as an exogenous endowment …