Sun, David; Chow, Da-Ching - Volkswirtschaftliche Fakultät, … - 2014
We introduced in this study a model of sovereign debt with an embedded Down-and-In Put (DIP) to capture the … discontinuity in sovereign debt pricing. This study suggests that debt forgiveness is a more effective solution in debt crisis, as … problems. Our model of default threshold for sovereign debt is more tractable than existing works in literature, especially in …