This paper explores the link between default risk and fiscal procyclicality. We show that countries with higher … sovereign risk have a more procyclical fiscal expenditure policy, which is driven mostly by transfers. We build a small open … economy model with income inequality, social transfers, and default risk to rationalize this fact. Without default risk …

Emerging economies that are large oil producers have sizable external debt, their country risk rises when oil prices … risk on impact and in the long-run, oil reserves reduce it marginally on impact but increase it in the long-run. We propose … dynamics of reserves and country risk in response to oil-price shocks switch from negatively correlated on impact to positively …

aspects of the data that exhibit substantial variation across these countries. Importantly, when present sudden stop risk and …

This paper analyzes the impact of limited enforceable international loans on international risk sharing and trade … exports. In contrast to existing studies, risk sharing is low for large elasticities of substitution between the domestic and …

sovereign to corporate risk, among other considerations. …