Cherian, Joseph A; Perotti, Enrico C - C.E.P.R. Discussion Papers - 1999
, investment, and asset prices over time, as well as perceived policy risk. Quite generally, perceived risk abates as current …. The approach thus provides a measure of the evolution over time of perceived political risk from market prices. We next … compute option prices under the process generated by the model's hazard rate of policy reversal plus an additional market risk …