Business Cycles and the Fiscal Theory of Sovereign Risk
2012/01/10
研討會日期 : 2012-01-10
時間 : 14:30
主講人 : Professor Yu-Ning Hwang
地點 : Conference Room B110
演講者簡介 : Yu-Ning Hwang received her Ph.D. in Economics from Washington University in 2006. She is currently serving as Assistant Professor of Economics at National Chengchi University. Her research field is in macroeconomics and international finance.
演講摘要 : The concerns about sovereign risks have pervaded all over the world since 2009. The theory of sovereign risk by Uribe (2006) shows that a country will experience hyperinflation or deflation under zero default rate. By using a simplified dynamic stochastic general equilibrium model with income tax, the analytical solutions show that an adverse productivity shock will drive up the sovereign risk and result in inflation fluctuations. In contrast to Uribe (2006), the inflation rate is stationary under zero default policy when shocks are mean-reverting. The paper also shows that the procrastination of sovereign default can help prevent the country from the sovereign default risk.
