Alvarez, Fernando; Dixit, Avinash - In: Journal of Monetary Economics 61 (2014) C, pp. 78-109
A break-up of the Eurozone is no longer regarded as implausible. This will be a costly and irreversible decision in conditions of continuing uncertainty; therefore it is amenable to analysis in the real options framework. We do so by solving as an n-dimensional optimal stopping problem with...