Kriwoluzky, Alexander; Müller, Gernot; Wolf, Martin - C.E.P.R. Discussion Papers - 2013
Sovereign yield spreads within currency unions may reflect the risk of outright default. Yet, if exit from the currency … country of a currency union, allowing both for default within and exit from the union. Initially, the government runs … point, giving rise to default and currency risk. Second, the macroeconomic implications of both sources of risk differ …