estimation, a news shock has a larger contemporaneous impact on sovereign credit spreads than a comparable shock to labor …-term debt does not shield the country from bad news shocks, and it may even exacerbate default risk. Finally, an increase in the …

This paper proposes a model of sovereign default that features interest rate multiplicity driven by rollover risk. Our … reinforces the rollover risk. By exploiting complementarity between the traditional notions of slow- and fast-moving crises, our …

This paper studies the effect of implementing fiscal rules on sovereign default risk and on the probability of large … that fiscal rules are beneficial for macroeconomic stability, as they significantly reduce both sovereign risk perception …

Political risk is a significant determinant of bond yields and economic growth in both developed and emerging markets … and we develop a debt sustainability analysis model with both channels using a country ratings proxy of political risk …. Political risk also affects a sovereign's willingness to pay and it can render debt unsustainable, triggered by changes in the …

paper presents a model where a creditor, such as an IFI, that can commit to lend limited amounts at the risk-free rate and … states. This suggests such lenders should not differentiate lending interest rates according to risk and should not …