Reduced-form models of default that attribute a large fraction of credit spreads to compensation for credit event risk … typically preclude the most plausible economic justification for such risk to be priced--namely, a “contagious” response of the … economy comprised of a large number of firms, credit event risk premia have an upper bound of just a few basis points and are …

Program (HARP). We use a competing risk model to estimate the sensitivity of default risk to downward adjustments of borrowers … an average loss given default of 35.2 percent, this lower default risk implies reduced credit losses of 134 basis points …

function takes the form of cubic parabola, where the risk aversion behavior ends at the saddle point of the comprehensive … the ambiguity of the departure from risk-neutrality. This ambiguity can produce the ordinary risk seeking behavior as well … as mathematical catastrophes of Veblen-effect's imprudence and over prudence of family altruism. The comeback to risk …