As a result of various shocks and natural disasters, the scientific community has expressed a particular interest in the study of countries resilience capacity, after being affected by a hazard. In association with this concern, hazard risk management is becoming a relevant and highly debated...

This paper assesses the consequences of implementing a joint liability debt system in a two-country small open economy model. With joint liability a default of one country makes the other participant liable for its debt. The results highlight a trade-off between the contagion risk, in the sense...